[Asia Economy Reporter Oh Hyung-gil] The loss ratio of domestic non-life insurance companies has been steadily increasing.
According to the Non-life Insurance Statistical Yearbook published by the Korea Insurance Development Institute on the 28th, the overall loss ratio of non-life insurance in 2018 was 82.1%, up 1.1 percentage points from the previous year.
While the loss ratio for large-scale long-term insurance decreased by 1.1 percentage points, the loss ratios for automobile insurance and general non-life insurance rose significantly.
The loss ratio for automobile insurance increased by 5.2 percentage points from 73.4% in 2017 to 78.6% in 2018, due to a surge in oriental medicine treatment costs. This increase continued last year, with the automobile insurance loss ratio reaching 82.3% (89.7% including loss adjustment expenses) as of October last year.
Additionally, the loss ratio for general non-life insurance rose 3.0 percentage points from the previous year to 63.3%. Insurance payouts increased in personal finance credit insurance and other special insurance such as livestock disaster insurance and crop disaster insurance.
The total earned premiums of non-life insurers grew 3.4% year-on-year to KRW 89.8192 trillion in 2018.
With growth in accident and health insurance, long-term insurance earned premiums increased by 3.0% to KRW 50.57 trillion.
As insurers reduced sales of savings-type insurance products in preparation for the adoption of international accounting standards (IFRS 17), the growth rate of savings-type insurance earned premiums recorded -28.5% in 2018, marking three consecutive years of negative growth following -21.2% in 2016 and -23.3% in 2017.
General non-life insurance reached KRW 9.1164 trillion, up 10.8%, driven by growth in guarantee insurance in the personal finance market, mobile phone insurance, and special insurance such as livestock disaster insurance.
On the other hand, automobile insurance premiums decreased by 1.4% year-on-year to KRW 15.8387 trillion due to increased sales of discounted products.
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