In the first quarter of this year, auto insurance loss ratios at insurers rose from a year earlier.
According to the non-life insurance industry on the 22nd, the simple average auto insurance loss ratio at the four major companies — Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance — came to 85.9% in the first quarter of this year. That was up 3.4 percentage points from the same period last year.
The auto insurance loss ratio is the percentage obtained by dividing the aggregates of total accident compensation by premium income. In the insurance industry, a loss ratio around 80% is generally seen as the break-even point for auto insurance, because the remaining roughly 20% is spent on business expenses such as labor costs.
A first-quarter loss ratio above 80% means payouts and business expenses exceeded premium income. It is seen as the combined result of four years of continued premium cuts and rising labor and parts costs.
An industry official said, "With more spring outings, traffic volume is set to increase, and accidents will rise along with it," adding, "Given cost drivers such as higher parts and repair costs and the continued issue of overtreatment of patients with minor injuries, the loss ratio is likely to remain elevated."