Insurers implemented auto insurance premium hikes last month due to accumulated losses, but the loss ratio is still in negative territory.
According to the non-life insurance industry on the 24th, the auto insurance loss ratio of the five major non-life insurers—Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance—was 86.2% last month, down 2.5 percentage points from a year earlier.
The auto insurance loss ratio is the sum of claim payouts divided by premiums, and the industry generally views the 80% range as the break-even point for auto insurance. Auto insurance has stayed in the red for nearly a year since April last year.
By insurer, Samsung Fire & Marine Insurance was highest at 88.8%, followed by KB Insurance at 87.9%, DB Insurance at 87.8%, Meritz Fire & Marine Insurance at 84.0%, and Hyundai Marine & Fire Insurance at 82.4%.
Last year's auto insurance deficit was driven by a combination of factors, including four years of accumulated premium cuts, an increase in accidents due to natural disasters, a rise in overtreatment of minor injury patients, and higher repair fees. In response, non-life insurers raised auto insurance premiums by 1.3% to 1.4% last month.