September Auto Insurance Loss Ratio Hits 94.1%: Increased Travelers and Overtreatment Cited as Causes

Last month, the loss ratio for auto insurance at major non-life insurance companies exceeded 94%.

According to the non-life insurance industry on October 22, the auto insurance loss ratio for the four major non-life insurers-Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance-stood at 94.1% last month, up 7.8 percentage points from the same period last year. The cumulative loss ratio from January to September was 85.4%, marking the highest level since 2020 (85%).

By company, the loss ratios were 92.7% for Samsung Fire & Marine Insurance, 95.2% for DB Insurance, 93.8% for Hyundai Marine & Fire Insurance, and 94.8% for KB Insurance, all surpassing 90%. The insurance industry considers a loss ratio of 82% as the break-even point for auto insurance.

The rise in loss ratios was influenced by four consecutive years of insurance premium reductions, increased costs such as repair fees, a higher number of accidents, and overtreatment at Korean medicine hospitals. Last month, the loss ratio was further elevated due to increased long-distance travel for activities such as grave maintenance ahead of Chuseok.

An industry official stated, "In October, the number of accidents is expected to rise due to increased travel demand during the autumn leisure season. The loss ratio is likely to continue worsening due to higher repair fees and inflation-driven increases in parts and repair costs."

Car accident image.