Auto Insurance Hit by Double Whammy of Cold Waves, Heavy Snowfall, and Premium Cuts in January and February
In the first quarter, the loss ratio for auto insurance at major non-life insurance companies worsened to the 80% range. The increase was attributed to a rise in accidents caused by cold waves and heavy snowfall at the beginning of the year, as well as a reduction in auto insurance premiums. As a result, the loss ratio rose by 3.4 percentage points compared to the previous year.
According to the non-life insurance industry on April 23, the auto insurance loss ratio for the five major companies?Samsung Fire & Marine Insurance, DB Insurance, Meritz Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and KB Insurance?stood at 82.5% in the first quarter. This represents an increase of 3.4 percentage points from 79.1% in the same period last year.
In the insurance industry, a loss ratio of 80% is generally considered the break-even point for auto insurance, meaning the current figure exceeds that threshold.
An industry official stated, "Accidents surged in January and February due to cold waves and heavy snowfall, and the decrease in auto insurance premiums further contributed to the rise in the loss ratio."
The official added, "Traffic volume and accidents are expected to increase from this month onward. In addition, higher repair fees and increased costs for parts and repairs are expected to raise physical damage losses, leading to a further deterioration in the annual auto insurance loss ratio compared to last year."
Major non-life insurance companies have confirmed auto insurance premium reduction rates of up to 1%.
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