Last Year’s Auto Insurance Sales Reach 20.6641 Trillion KRW... Down 1.8% from Previous Year
Break-even Point at 100.1%... Up 3 Percentage Points from Previous Year
Insurance Operating Profit at Minus 9.7 Billion KRW... First Deficit in Four Years
Last year, it was revealed that automobile insurance fell below the break-even point.
According to the '2024 Automobile Insurance Business Performance (Provisional)' released by the Financial Supervisory Service on the 7th, last year's automobile insurance sales (gross written premiums) amounted to 20.6641 trillion KRW, a decrease of 1.8% (38.43 billion KRW) compared to the previous year.
The decline in sales was due to a slowdown in the growth of vehicles subscribing to automobile insurance and a continuous decrease in automobile insurance premiums. The growth rate of automobile insurance subscriptions was 2.4% in 2022 but dropped to 0.9% last year. The average automobile insurance premium fell from 723,434 KRW in 2022 to 691,903 KRW last year.
The expense ratio, which is the proportion of operating expenses to sales, was 16.3%, down 0.1 percentage points from the previous year. On the other hand, the loss ratio, which is the ratio of insurance claims paid out relative to premiums received during the same period, increased by 3.1 percentage points to 83.8%. The break-even point (BEP), which is the sum of the expense ratio and loss ratio, rose by 3 percentage points to 100.1% compared to the previous year. A break-even point exceeding 100% means that the expenses, including insurance claims paid, exceeded the premiums received.
Insurance operating profit turned to a loss of 9.7 billion KRW, marking the first deficit in four years since 2020. Investment income recorded 598.8 billion KRW, resulting in a total automobile insurance profit of 589.1 billion KRW last year.
The market share of the four major automobile insurance companies?Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance?stood at 85.3%, maintaining the oligopoly structure at the previous year's level. The market share of small and medium-sized companies (Meritz Fire & Marine Insurance, Hanwha General Insurance, Lotte Insurance, MG Insurance, Heungkuk Fire & Marine Insurance) decreased by 0.1 percentage points to 8.3%, while the market share of non-face-to-face specialized companies (AXA General Insurance, Hana Insurance, Carrot General Insurance) rose by 0.1 percentage points to 6.4%.
By sales channel, the proportions were highest in the following order: face-to-face 47.8%, cyber marketing (CM) 35.8%, telemarketing (TM) 16.0%, and platform marketing (PM) 0.4%.
A Financial Supervisory Service official stated, "We plan to promptly implement follow-up measures such as revising terms and conditions to ensure the successful establishment of the 'Automobile Insurance Fraud Improvement Measures' jointly announced with the Ministry of Land, Infrastructure and Transport and the Financial Services Commission." He added, "We will support the stable maintenance of loss ratios in the future by preventing improper insurance claim leakage and other issues."
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