Maintaining Profit Zone Consistently Since Early Year
This year, the loss ratio of automobile insurance (the ratio of paid insurance claims to received premiums) for major non-life insurance companies remains within the profitable range. Pressure to further reduce insurance premiums is expected to intensify.
According to the non-life insurance industry on the 20th, the average cumulative loss ratio from January to August this year for the four major large non-life insurers?Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance?which account for 85% of the automobile insurance market, was 77.8%. This is 0.2 percentage points higher than the same period last year but still at a stable level. Generally, the industry considers a loss ratio range of 78?82% as the breakeven point for automobile insurance.
Even excluding August, when travel is heavy due to the vacation season, performance was solid. The average loss ratio for the four insurers was 80.9%, nearly 2 percentage points lower than August last year’s 82.7%. Despite concerns over flooding accidents caused by Typhoon "Khanun" and others, the results were satisfactory.
Based on cumulative data through August, the individual loss ratios of large non-life insurers were lowest in the order of KB Insurance (77.6%), DB Insurance (77.7%), Hyundai Marine & Fire Insurance (77.8%), and Samsung Fire & Marine Insurance (78.1%). Among mid-sized non-life insurers, Meritz Fire & Marine Insurance (77.6%) and Lotte Insurance (79.5%) also recorded loss ratios in the 70% range.
As win-win finance was demanded across financial sectors, the possibility of automobile insurance premium reductions in the non-life insurance industry has increased. Last year, the cumulative loss ratio of the four insurers was 80.4%, which eventually led to a roughly 2% premium reduction at the beginning of this year. Financial authorities are reportedly monitoring the loss ratio situation in September and October before ordering premium cuts or other measures.
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