Following last year, auto insurance loss ratios are worsening again this year. A rise in accidents due to seasonal factors such as heavy snowfall and icing, along with higher labor costs driving up auto parts and repair costs, has had an impact.
According to the nonlife insurance industry on the 24th, the auto insurance loss ratio at the end of January this year for five major nonlife insurers — Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance, and Meritz Fire & Marine Insurance — was 88.5%, up 6.7 percentage points (p) from the same period a year earlier.
By insurer, Samsung Fire & Marine Insurance recorded 89.6%, DB Insurance 85.6%, Meritz Fire & Marine Insurance 85.0%, Hyundai Marine & Fire Insurance 94.0%, and KB Insurance 88.4%. Last month, all major nonlife insurers that sell auto insurance posted losses as their loss ratios far exceeded 80%.
The nonlife industry views around 80% as the loss ratio breakeven point for auto insurance when factoring in business expenses. The rise in loss ratios appears to be the combined result of the effect of premium cuts that continued for four consecutive years in the past and an increase in accidents.
This month, large nonlife insurers raised auto insurance premiums by 1.3% to 1.4%. This is the first auto insurance premium increase in about five years.