In the first half of this year, non-life insurers' auto insurance posted a loss of nearly 200 billion won. It is the first swing to a deficit in six years.
According to the insurance industry on the 26th, the auto insurance operating balance of all non-life insurers in the first half of this year recorded a deficit of about 189 billion won. A first-half deficit is the first since 2020.
For the non-life sector, after a deficit of 126.2 billion won in the first half of 2020, reduced driving due to COVID-19 led to a turnaround to profit from 2021, which continued through last year.
By year: ▲2021, 413.7 billion won ▲2022, 626.4 billion won ▲2023, 555.9 billion won ▲2024, 332.2 billion won ▲2025, 30.2 billion won in profit.
This year, the loss ratio also worsened. The first-half cumulative auto insurance loss ratio of the four major non-life insurers (Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance) was 84.5%, up 1.9 percentage points from a year earlier.
Recently, amid a surge in oil prices due to the U.S.-Iran war that reduced vehicle use, premiums rose 1.3%–1.4%. Even so, the industry's weak performance is attributed to insurance leakage caused by overtreatment of minor-injury patients (injury grades 12–14) centered on Korean medicine hospitals and clinics.
According to the General Insurance Association of Korea, as of last year, the per capita treatment cost at Korean medicine hospitals was 1.08 million won, 3.1 times that of Western medicine hospitals (350,000 won). Billing practices such as de facto claims for higher-grade room charges, expensive magnetic resonance imaging (MRI) scans, and "set" treatment claims are cited as problems.
Police are also investigating Jaseng Hospital of Korean Medicine on suspicion of insurance fraud worth tens of billions of won. The Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency's Violent Crime Investigation Division conducted searches and seizures on five locations, including Jaseng Hospital of Korean Medicine in Gangnam District and the Jaseng Medical Foundation, on the 8th of this month.
This followed complaints filed by the four major non-life insurers alleging that Jaseng Hospital of Korean Medicine indiscriminately prescribed herbal medicine to traffic accident patients and pocketed hundreds of billions of won in insurance payouts.
In addition, rising costs such as higher repair fees and wages for day laborers, and the limited scope of premium increases, are also mentioned as reasons for worsening earnings.