As a result of extreme heat and heavy rain during the summer, the auto insurance loss ratio of major property and casualty insurers in July has exceeded 90% for the first time in the past five years.
According to the property and casualty insurance industry on the 21st, the auto insurance loss ratio of five major insurers, including Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance, was 92.0%, up 10.2 percentage points from the same period last year.
Typically, in November and December, the auto insurance loss ratio soars to the 90% range due to heavy snowfall. However, it is the first time since the data collection began in 2021 that the loss ratios of the five companies have reached the 90% range as of July.
The auto insurance loss ratio is the total compensation for accidents divided by the premium. The insurance industry considers an 80% loss ratio as the breakeven point for auto insurance.
As of last month, the cumulative loss ratio for this year also recorded 84.0%, indicating that it has not exceeded the breakeven point, which is an increase of 4.3 percentage points compared to the same period last year.
The deterioration of the auto insurance loss ratios of the insurers can be attributed to ongoing premium reductions and an increase in over-treatment of outpatients. Additionally, weather factors like heat waves and heavy rainfall have contributed to the soaring loss ratios.