Auto insurance premium (CG)▶ Click here for a larger view
Samsung Fire[000810]decided to cut auto insurance premiums by 1.2% in April.
Other non-life insurers are reviewing similar cuts.
Samsung Fire & Marine Insurance announced on the 16th that it has decided to cut personal auto insurance premiums by an average of 1.2%.
Considering that the insurance premium per subscriber is around 800,000 won, this adjustment will lower the premium burden by regarding 9,000 won on average.
Samsung Fire & Marine Insurance plans to apply the reduced insurance premiums from the contract commencement on April 11th following preparing the computerized system. Depending on the insurance rate verification, it may be later than this.
Auto insurance premium adjustment is the first in two years following the 3% increase in January 2020.
Samsung Fire & Marine Insurance explained that it decided to cut insurance premiums in order to share with customers the effect of improving the auto insurance loss ratio as the number of vehicle trips decreased and accidents decreased due to the prolonged COVID-19.
Samsung Fire & Marine Insurance said, “As factors such as accumulated auto insurance losses and maintenance fees continue to rise, we have been cautious in adjusting insurance premiums. said
As for auto insurance, the product structure of each company is almost similar and price competition in the online (direct) sales channel is fierce. If Samsung F&M, the No. 1 company in the market, cuts insurance premiums, it is expected that major competitors will adjust their premiums one following another in a similar way.
The combined auto insurance market share of the four major non-life insurers, Samsung Fire & Marine, Hyundai Marine & Marine Insurance, DB Non-life Insurance, and KB Insurance, is regarding 85%.
Several other non-life insurers also said, “We are reviewing a similar level of cut,” and “the exact extent of the cut and the timing of its reflection are undecided.”
Non-life insurers with poor management and weak solvency are highly likely not to cut premiums.
Samsung Fire▶ Click here for a larger view
Last year, as auto insurance recorded a surplus due to a decrease in travel volume due to COVID-19, and non-life insurers achieved record highs, calls for lowering insurance premiums grew.
Last year, the loss ratio of the four major auto insurance companies was tentatively estimated to be 79.6 to 81.5 percent. The break-even point of auto insurance is known to be around 80% of the loss ratio.
The non-life insurance industry said that the situation should be watched a little more considering the unusual circumstances of last year’s surplus due to Corona 19, the maintenance fee increased by 4.5% at the end of last year, and the accumulated deficit of 9 trillion won over the past 10 years. They showed a cautious attitude in adjusting insurance premiums.
Over the past five years, auto insurance has been profitable only in 2017 and 2021, and the loss ratio in 2018-2020 was 85.7-92.9%. As a result, insurance premiums increased by 3.3-3.5% in January 2020.
However, as public opinion demanding a reduction in insurance premiums has increased due to soaring inflation and financial companies’ “best performance and performance pay feast,” some analysts say that non-life insurers have heard a “white flag” ahead of the presidential election.
[연합뉴스]
s ⓒ Yonhap News. Unauthorized reproduction and redistribution prohibited