South Korea auto insurers’ loss ratio rises to 84.8% through July

South Korea’s four largest non-life insurers recorded a simple-average auto insurance loss ratio of 84.8% for January through July, up 0.8 percentage point from a year earlier and above the roughly 80% level generally considered break-even after operating costs. DB Insurance had the highest ratio at 85.2%, followed by KB Insurance and Hyundai Marine & Fire Insurance at 84.8% each and Samsung Fire & Marine Insurance at 84.3%. Despite auto premium increases of about 1% early this year, higher repair labor rates, daily-hire worker wages, parts and repair costs, as well as claims leakage linked to prolonged treatment for minor injuries and future medical expenses, are keeping the business loss-making. The ratio is expected to worsen in the second half after damage from August torrential rains, including in Geoje and Tongyeong, is reflected in claims.

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