Non-life insurers are moving to verify rates to lower premiums for paid-transport motorcycle personal injury coverage. Non-life insurers and the Financial Supervisory Service are discussing ways to cut premiums by 20% to 30% from current levels. Paid-transport motorcycle personal injury insurance is a product that provides coverage when a driver is injured in an accident while operating a motorcycle for revenue, such as for delivery or quick service.
According to the finance industry on the 13th, some non-life insurers have told the Financial Supervisory Service (FSS) that they intend to ask the Korea Insurance Development Institute to verify the rates for paid-transport motorcycle personal injury premiums. Requesting rate verification is a process to check how much premiums can be lowered. Typically, an insurer calculates the premium rate, requests verification, and then reports it to the FSS and applies it based on the results.
The Financial Supervisory Service (FSS) announced a plan last month for the "rationalization of the motorcycle insurance rate system." The FSS plans to push for cuts in motorcycle premiums, taking into account insurers' loss ratios, to ease the premium burden on livelihood and young delivery workers. The revised system will take effect as early as the first quarter of this year.
The non-life industry is expected to fully begin work on motorcycle rate cuts after finalizing the size of the ongoing auto premium hikes. Four major non-life insurers—Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance—recently completed the auto insurance rate verification process with the Korea Insurance Development Institute. The final premium increase is expected to be 1.3% to 1.5%.
Non-life insurers' results are on a downward trend due to pressure from the financial authorities to cut premiums. From January to September last year, net income at 31 non-life insurers was 6.461 trillion won, down 19.6% from a year earlier. Although investment gains, such as asset management profits, increased, insurance income fell due to a rise in loss ratios.
An official at the Financial Supervisory Service (FSS) said, "Some non-life insurers are reviewing the extent of premium cuts based on their own statistics."