In the first half of this year, the loss ratio of auto insurance worsened, resulting in insurance profits declining by more than 90% compared to last year.
According to the Financial Supervisory Service's '2025 First Half Auto Insurance Business Performance (provisional)' released on the 7th, the auto insurance revenue in the first half was 10.2115 trillion won, a 2.9% decrease compared to the same period last year (10.5141 trillion won). The growth of auto insurance has slowed due to a decrease in average auto insurance premiums for four consecutive years.
The total profit and loss from auto insurance was 382 billion won, down 43.9% from 681 billion won in the same period last year. In particular, the insurance profit and loss (30.2 billion won) dropped by 90.9% during the same period due to worsening loss ratios. This was caused by shrinking revenue leading to decreased earned premiums, increased hospital treatment costs centered around oriental medicine treatments, and rising loss amounts due to increased parts costs from automobile manufacturers.
However, investment profits increased by 0.8% to reach 301.8 billion won. The combined ratio of auto insurance (loss ratio + expense ratio) recorded 99.7%, nearing the breakeven point of 100%. The expense ratio (net business expenses/earned premium) was similar to the same period last year at 16.4%, but the loss ratio rose by 3.1 percentage points to 83.3%.
The market share of large companies (Samsung, Hyundai, KB, DB) remained at the same level as last year at 85.3%. The market share of small and medium-sized companies (Meritz, Hanwha, Lotte, MG, Heungkuk) increased by 0.2 percentage points to 8.5%, while the market share of non-face-to-face specialized companies (AXA, Hana, Carrot) decreased by 0.2 percentage points to 6.4%.
The FSS noted, "Factors that worsen the loss ratio will continue to exist in the second half due to large-scale heavy rainfall in July and increased traffic during the fall vacation season," adding, "We plan to closely monitor the loss ratio and performance trends of auto insurance and make efforts to ensure that the loss ratio can be managed stably through preventing insurance leakage."