Auto insurance premiums are expected to rise by up to 10,000 won this year.
According to the insurance industry on Jan. 12, Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and DB Insurance set auto insurance premium hikes at 1.3% to 1.4%. Given that the average personal auto insurance premium was 692,000 won in 2024, the additional annual burden will be under 10,000 won.
Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance set the hike at 1.4%, and DB Insurance set it at 1.3%. If the large non-life insurers, which account for more than 80% of the auto insurance market share, raise auto insurance premiums, the remaining small and midsize companies are expected to follow suit.
Insurers said that, considering their deficits, premiums should be raised by more than 2%. However, reflecting the views of the financial authorities, which considered the burden on household prices, they reportedly set the increase at around 1%.
This is the first increase in auto insurance premiums in five years. Non-life insurers cut premiums for four straight years starting in 2022. But during that period, surging loss ratios due to higher costs such as parts and repair expenses led to deficits.
The average loss ratio from January to November last year at five non-life insurers, including Meritz Fire & Marine Insurance, was 86.2%. In auto insurance, when the combined ratio—loss ratio plus the expense ratio (about 16%)—exceeds 100%, the business posts a loss.