Automobile Insurance Loss Ratio Surges to 84%

The automobile insurance loss ratio of major non-life insurance companies has exceeded 84%, influenced by the increase in vehicle movement during the holiday season and the electric car fire in Incheon.

According to the non-life insurance industry, the average automobile insurance loss ratio of the four major non-life insurance companies (Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance) last month was 84.2% (simple average of the four companies), a sharp increase of 3.6 percentage points (p) compared to the same period last year (80.6%).

The loss ratios of the four companies were as follows: Samsung Fire & Marine Insurance (84.5%), Hyundai Marine & Fire Insurance (83.5%), KB Insurance (84.8%), and DB Insurance (84.0%).

The cumulative loss ratio of the four companies from January to August this year also reached 80.4%. This represents a 2.6% increase from last year (77.8%) and exceeded 80%. The loss ratio corresponding to the break-even point of automobile insurance is usually considered to be around 80% when considering operating expenses, etc. Exceeding this means entering the deficit zone.

Small and medium-sized non-life insurance companies also experienced similar loss ratios. During the same period, Lotte Non-Life Insurance’s loss ratio was 84.0%, Hanwha Non-Life Insurance’s was 82.9%, and Meritz Fire & Marine Insurance’s was 82.6%.

An insurance industry official attributed the increase in loss ratios to the rise in accident reports during the summer vacation period and the electric vehicle fire that occurred in Incheon. The official predicted that the loss ratio would continue to increase due to the expected rise in vehicle movements during the fall vacation season, as well as the potential damage caused by autumn typhoons and winter heavy snow and freezing.