Due to the recent extreme heat wave and torrential rains that hit the southern regions, the loss ratio of auto insurance for major non-life insurance companies has surged, raising a red flag for deficits across the industry.
According to the non-life insurance industry, last month, the average auto insurance loss ratio of four major companies, including Samsung Fire & Marine, DB Insurance, Hyundai Marine & Fire, and KB Insurance, reached 86.6%, an increase of 4.6 percentage points (p) compared to the same month last year.
Generally, when the loss ratio exceeds 80%, it is considered to adversely affect the profitability of insurance companies.
In particular, major insurers such as Samsung Fire & Marine (86.5%), Hyundai Marine & Fire (86.3%), KB Insurance (86.0%), and DB Insurance (87.5%) all recorded loss ratios in the mid-to-high 80% range, signaling an emergency across the industry.
The cumulative loss ratio from January to September this year was 81.1%, an increase of 2.9% compared to the same period last year, making the impact of climate change on the auto insurance market even more pronounced.
In September, the record-breaking heat wave and heavy rainfall led to a significant increase in the number of car accidents and damages, which is cited as the main cause.
An industry official expressed concern, saying, “The possibility of a deficit in the auto insurance sector is increasing due to the rise in accidents caused by ongoing climate change, combined with factors such as reduced insurance premiums. If additional climate factors like heavy snowfall or icing occur during the upcoming winter, the deterioration in performance could worsen.”
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Auto Insurance Loss Ratios Surge Due to Heatwaves and Heavy Rain, Triggering Deficit Warning
Due to the recent extreme heat wave and torrential rains that hit the southern regions, the loss ratio of auto insurance for major non-life insurance companies
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