(image: Korea Bizwire)
SEOUL, April 18 (Korea Bizwire) – Car insurers in South Korea turned to a profit in 2021 for the first time in four years thanks to a pandemic-caused fall in loss rates and a rise in insurance premiums and subscribers, data showed Monday.
According to the data by the Financial Supervisory Service (FSS), 12 car insurers’ combined operating income came to 398.1 billion won (US$323.7 million) last year, a turnaround from a loss of 379.9 billion won tallied a year earlier.
They turned to a profit for the first time since 2017.
The turnaround was caused by a rise in insurance premiums and subscribers. A fall in loss rates stemming from fewer outdoor activities amid the pandemic also contributed to the profit, the FSS said.
Car insurers’ loss rates stood at 81.5 percent last year, down 4.2 percentage points from a year earlier, the data showed. It was the lowest level since 2017.
As of end-2021, the size of the car insurance industry grew to 20.28 trillion won in terms of original premiums, up 3.7 percent from a year earlier. It was the first time that the market size has exceeded the 20 trillion-won mark.
The FSS said it will closely watch the car insurance market, expecting the accident rates could increase down the road as most social distancing curbs have been lifted, a move that will allow people to increase their outdoor activities.
(Yonhap)
