Stranded cars, which had been submerged by the heaviest rainfall of over 100 millimeters per hour in 80 years on the night of Aug. 8, 2022, block a street in southern Seoul on the morning of Aug. 9. (Yonhap)
SEOUL, Aug. 10 (Korea Bizwire) — As a large number of vehicles have suffered from water damage due to the heavy rain that hit Seoul and surrounding regions late Monday, the share prices of non-life insurance companies slipped the following day.
Shares of Lotte Insurance closed at 1,740 won on Tuesday, down 1.97 percent from the previous trading day.
Shares of other non-life insurance companies, including Heungkuk Fire & Marine Insurance, DB Insurance, Samsung Fire & Marine Insurance, Hanwha Non-Life Insurance and Hyundai Marine & Fire Insurance fell by 1.90 percent, 1.85 percent, 1.55 percent, 1.17 percent and 0.88 percent, respectively.
In contrast, shares of used car and car rental firms such as K Car, SK Rent-A-Car, and Lotte Rental jumped by 6.34 percent, 3.88 percent and 2.65 percent, respectively.
On Tuesday, major non-life insurance companies received more than 3,000 vehicle damage claims resulting from torrential rain, and such reports continue to increase.
Vehicle water damages are one of the factors that have a direct impact on the deterioration of non-life insurance companies’ car insurance loss ratio.
“Vehicle damages caused by heavy rain would lead to an increase in the number of insurance claims,” said Kang Seung-geon, a researcher at KB Securities.
“Given that non-life insurance companies maintained a low level of loss ratio since the COVID-19 outbreak, the increase in the number of vehicle damages will inevitably have a negative impact on their third quarter performance.”
J. S. Shin (js_shin@koreabizwire.com)
