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Lotte Insurance CI. (Photo: Lotte Insurance) |
[Alpha Biz= Paul Lee] South Korea’s leading non-life insurers are raising auto insurance premiums in response to deteriorating loss ratios, citing mounting losses in the segment.
According to the insurance industry on March 2, Lotte Insurance raised auto insurance premiums by 1.4% starting March 1, marking its first increase in nearly five years. The move follows a 1.4% hike by Samsung Fire & Marine Insurance on Feb. 11, after which DB Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Meritz Fire & Marine Insurance also lifted premiums by around 1.3% to 1.4%.
The increases come as auto insurance loss ratios continue to climb. The combined loss ratio for the five largest insurers—Samsung Fire, DB Insurance, Hyundai Marine, KB Insurance, and Meritz—averaged 86.88% last year. The industry generally considers a loss ratio of around 80% as the breakeven level, but monthly figures exceeded that threshold in all months except March.
Industry officials said losses have accumulated after more than four years of premium cuts implemented under policies aimed at supporting consumers, while rising repair costs driven by vehicle premiumization have further worsened loss ratios.
As a result, a near-term decline in premiums appears unlikely. The combined auto insurance result of the five major insurers posted a loss of KRW 458.5 billion last year, reversing a profit of KRW 283.7 billion recorded in 2024.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
