H1: First Half Auto Insurance Performance Down 40%... Big 4 Market Share Expands Despite Launch of Comparison and Recommendation Services

Automobile Insurance Profit and Loss in First Half: 332.2 Billion KRW, Down 40.2% YoY
Loss Ratio at 80.2%, Exceeding Break-even Point
Big 4 Market Share at 85.4%, Up 0.1%p YoY

Automobile insurance performance in the first half of this year has sharply declined by more than 40% compared to the same period last year. Despite the launch of car comparison and recommendation services, the market share of the four major companies has further expanded.

According to the 'Automobile Insurance Business Performance (Provisional)' released by the Financial Supervisory Service on the 10th, the automobile insurance profit and loss in the first half of this year was 332.2 billion KRW, a sharp decrease of 40.2% (223.7 billion KRW) compared to the same period last year. Automobile insurance profits have been in surplus since 2021, but the profit margin is gradually shrinking due to worsening loss ratios. The loss ratio in the first half of this year was 80.2%, up 2.2 percentage points from the same period last year. The non-life insurance industry considers a loss ratio of 80% as the break-even point. Exceeding this figure means there is no profit or a loss when considering labor and marketing costs. A Financial Supervisory Service official explained, "Although earned premiums increased by 185.2 billion KRW compared to the same period last year, the number of accidents and the loss amount per accident increased more, worsening the loss ratio."

(Source: Financial Supervisory Service)

Automobile insurance sales amounted to 10.5141 trillion KRW, a decrease of 1.2% (124.4 billion KRW) compared to the same period last year. This was influenced by the government's request for participation in win-win finance, which led to an average 2.5% reduction in automobile insurance premiums this year.

The market share of major companies such as Samsung, Hyundai, KB, and DB was 85.4%, up 0.1 percentage points from the same period last year. Although the launch of insurance comparison and recommendation services in January was expected to draw attention to automobile insurance from small and medium-sized companies, the oligopoly of major companies has rather solidified. However, among small and medium-sized companies, the market shares of Meritz, Hanwha, Lotte, MG, and Heungkuk decreased, while the market shares of non-face-to-face insurers such as AXA, Hana, and Carrot increased.

By sales channel, face-to-face accounted for 48%, mobile (CM) 35.6%, and telemarketing (TM) 16.1%. Overall, the trend of decreasing face-to-face channels and increasing CM channels continues.

A Financial Supervisory Service official said, "Although the upward trend in automobile loss ratios is steeper than in previous years, it is still at a lower level than before the COVID-19 pandemic," adding, "We will continue efforts to improve systems to prevent insurance payout leakage so that the loss ratio can be maintained stably."