Insurance Companies Achieve 398.1 Billion KRW Profit in Car Insurance Last Year, Turning Profitable After 4 Years

by Lee Changhwan

Published 18 Apr.2022 12:00(KST)

Source: Financial Supervisory Service

[Asia Economy Reporter Changhwan Lee] Last year, domestic insurance companies succeeded in turning a profit in the automobile insurance business for the first time since 2017.

According to the Financial Supervisory Service on the 18th, the total operating profit of major domestic insurance companies' automobile insurance last year was 398.1 billion KRW, an increase of 778 billion KRW compared to the previous year. This marks a return to profitability after four years since 2017.

The improvement in automobile insurance performance was due to a reduction in loss ratio caused by decreased mobility last year due to COVID-19. The automobile insurance loss ratio last year was 81.5%, down 4.2 percentage points from the previous year. This is the lowest level since 2017.

Although the accident rate declined due to COVID-19, premium income increased by 8.1% due to premium hikes and an increase in the number of insurance policies.

Last year, the size of the domestic automobile insurance market (based on gross written premiums) was 20.2774 trillion KRW, up 3.7% from the previous year, surpassing 20 trillion KRW for the first time.

The automobile insurance market was dominated by the four major companies?Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance?whose market share reached 85%.

The Financial Supervisory Service stated that after the end of COVID-19, as driving volume may increase and accident rates may rise, it plans to closely monitor market conditions such as monthly loss ratios and combined ratios of insurance companies.