The Big 4 Non-Life Insurers All Recorded Auto Insurance Loss Ratios Over 80% Last Month

Samsung, Hyundai, KB, and DB Loss Ratio at 82.2%

[Image source=Yonhap News]

Last month, the loss ratios for automobile insurance at four major domestic non-life insurance companies (Samsung, Hyundai, KB, and DB) all exceeded 80%.

According to the non-life insurance industry on the 21st, last month KB Insurance (84.4%), Hyundai Marine & Fire Insurance (82.4%), Samsung Fire & Marine Insurance (81.6%), and DB Insurance (80.5%) all recorded automobile insurance loss ratios above 80%. The average loss ratio of these four companies (simple average) was 82.2%, up 3.8 percentage points from 78.4% in the same month last year.

Accordingly, the cumulative loss ratio for January to July for the four companies also rose 2.4 percentage points from 77.5% last year to 79.9% this year.

The non-life insurance industry generally considers a loss ratio of around 80% as the breakeven point for automobile insurance, taking into account business operating expenses. With all four major companies exceeding this ratio, they have effectively entered a deficit zone. The industry analyzes that vehicle damages caused by falling objects and flooding due to the monsoon season and heavy rains were significant.

An insurance industry official explained, "It is estimated that vehicle damages amounting to approximately 32 billion KRW occurred due to the monsoon and heavy rains until the 23rd of last month, when heavy rains were frequent," adding, "As a result, automobile insurance losses increased, worsening the loss ratio compared to the previous year."