(image: Pixabay)
SEOUL, Feb. 16 (Korea Bizwire) — Major non-life insurance firms in South Korea saw their combined net profit fall 39.5 percent last year due to increased losses from their automobile and health insurance segments, industry data showed Sunday.
The top eight non-life insurance firms operating in the country reported a combined net profit of 1.75 trillion won (US$1.4 billion) in 2019, compared with a profit of 2.7 trillion won a year earlier, according to their financial reports.
Industry observers said ballooning losses in automobile and indemnity health insurance dragged down non-life insurers’ profitability.
Their combined operating loss from automobile insurance last year is estimated at 1.6 trillion won, more than double the 723.7 billion won loss a year earlier.
Their loss ratio for indemnity health insurance, or reimbursement-backed private medical insurance, had increased 9.1 percentage points to 130.9 percent as of the third quarter of 2019 compared to 121.8 percent in 2018.
A loss ratio above 100 percent means that insurance companies have paid more insurance claims to customers than collecting premiums from them.
Market leader Samsung Fire & Marine Insurance Co. posted a 39.5 percent on-year plunge in net profit to 647.8 billion won, the data showed.
Four other major firms — Hyundai Marine & Fire Insurance Co., DB Insurance Co. and KB Insurance Co. — also each suffered a drop of at least 10 percent in their 2019 net profit.
Meritz Fire & Marine Insurance Co. was the sole non-life insurer among the eight that saw an improvement in third-quarter earnings. Its net profit surged 28.4 percent on-year to 301.3 billion won, making it the industry’s No. 3 player.
Non-life insurance firms said they expect to have another difficult year in 2020 but are doing their best to boost profitability. They are planning to raise premiums for automobile insurance and toughen the process for insurance acceptance.
(Yonhap)
