Domestic non-life insurers plan to cut personal injury coverage premiums for for-hire motorcycles starting this month. The move follows policies the financial authorities have pursued to reduce premium burdens for couriers who deliver for a living. Personal injury coverage for for-hire motorcycles is a product that provides benefits when a rider is injured in an accident while operating a motorcycle for revenue, such as for delivery or quick-service.
According to the financial authorities and others on the 2nd, domestic non-life insurers plan to reduce personal injury coverage premiums for motorcycles that take effect from April for new contracts or renewals by about 20% to 30%. The non-life industry is said to have told the Financial Supervisory Service during the premium rate review process that it would fully implement the cut starting Apr. 1. Requesting a rate review means a process to verify how much the premium can be lowered.
The Financial Supervisory Service (FSS) announced a plan late last year to "rationalize the motorcycle insurance rating system." It said it would push to lower motorcycle insurance premiums to ease the premium burden on livelihood and young delivery riders. Meritz Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and KB Insurance, among other major non-life insurers, are said to have preemptively applied riders to motorcycle insurance products in February to reflect the related measures. The scope of the reductions reportedly varies to some extent depending on each company's conditions.
Non-life insurers' results are on a downward trend amid pressure from the financial authorities to cut premiums. Last year, total net income for non-life insurers was 7.2492 trillion won, down 16.2% from a year earlier. Insurance profit plunged by 2.6741 trillion won due to rises in long-term and auto loss ratios. In addition, the financial authorities recently have been demanding cuts in auto insurance, citing restrictions on vehicle use due to high oil prices.