Automobile Insurance Market Nears 20 Trillion Won... Top 4 Major Companies Dominate 85%

Financial Supervisory Service, 2020 Auto Insurance Business Performance
Auto Insurance Grows 11.6% Compared to Previous Year

[Asia Economy Reporter Oh Hyung-gil] Last year, the automobile insurance market grew by double digits, reaching a scale close to 20 trillion won. The automobile insurance market continues to expand steadily due to premium increases and a rise in the number of insurance subscriptions.

In particular, the market polarization is becoming more pronounced, with the market share of the four major companies?Samsung, Hyundai, DB, and KB?reaching an all-time high, while the market share of small and medium-sized companies and online companies is decreasing.

According to the Financial Supervisory Service on the 31st, the size of the automobile insurance market based on gross written premiums collected by 12 non-life insurance companies last year was 19.6 trillion won, growing 11.6% compared to the previous year.

Last year, non-life insurers implemented premium increases of 3-4% in the first half, and the number of automobile insurance subscriptions increased from 22.98 million units in the previous year to 23.64 million units last year.

The market share of the four major companies increased by 2.4 percentage points from 82.3% in the previous year to 84.7%, while small and medium-sized companies (Meritz Fire & Marine Insurance, Hanwha General Insurance, Lotte Insurance, MG Insurance, Heungkuk Fire & Marine Insurance) decreased by 2.3 percentage points from 12.3% to 10.0%. Online companies (AXA General Insurance, Hana Insurance, Carrot General Insurance) also slightly decreased from 5.4% to 5.3%.

Among the four major companies, Samsung Fire & Marine Insurance had the highest gross written premiums at 5.7847 trillion won, followed by Hyundai Marine & Fire Insurance at 4.0881 trillion won, DB Insurance at 4.0678 trillion won, and KB Insurance at 2.6106 trillion won.

Automobile Insurance Market Status (Source: Financial Supervisory Service)

The number of minor injury patients decreased, but insurance payouts increased... Oriental medicine treatment costs surged by 27%

Additionally, due to the impact of COVID-19 last year, the accident rate decreased, and the combined ratio (loss ratio + expense ratio) of automobile insurance fell by 8.5 percentage points from the previous year to 102.2%.

During the same period, the operating loss of automobile insurance improved from a deficit of 1.6445 trillion won to a deficit of 379.9 billion won.

The total automobile insurance payouts made by insurers last year amounted to 14.4 trillion won, with property damage compensation accounting for 7.8 trillion won, personal injury compensation 6.3 trillion won, and others 400 billion won.

Among the major insurance payout items related to personal injury compensation, future treatment costs and medical expenses mainly increased. In particular, oriental medical expenses (884.9 billion won) rose sharply by 26.7%, while western medical expenses (796.8 billion won) slightly decreased by 0.6%.

The number of minor injury patients was 1.59 million, down 6.8% from 1.71 million the previous year due to the decrease in accident rates, but the insurance payout per person increased by 12.1% to 1.83 million won.

The number of serious injury patients was 110,000, with an insurance payout per person of 14.24 million won, increasing by 4.1% and 2.6%, respectively, compared to the previous year.

The financial authorities pointed out that once COVID-19 subsides, the combined ratio may rise again due to an increase in automobile usage.

A Financial Supervisory Service official said, "We plan to closely monitor market conditions such as combined ratio trends and promote institutional improvements to prevent premium increases by stopping insurance payout leakages. Measures to prevent insurance payout leakages will include adjusting compensation methods for minor injury patient treatment costs and imposing additional submission obligations for minor injury patient medical certificates."