The three largest general insurers in South Korea have recorded combined net profits of more than KRW1.4 trillion (US$1.25 billion) for the first half of 2017, a 50% jump from the same period a year ago.
The nation’s three largest general insurers are Samsung Fire & Marine Insurance, Dongbu Insurance, and Hyundai Marine & Fire Insurance.
Samsung, which is the largest of the three, announced Monday that its first-half net profits were at KRW779.8 billion (US$695.94 million), up 51% over the previous year. The company’s motor insurance loss ratio improved by 3.6 percentage points to 76.3%, and it also showed improvement in its long-term and other general insurance loss ratios.
Dongbu also showed stellar growth for the first half of 2017. Its tentative net profits were at KRW369.8 billion (US$330.03 million), a 55.7% year-on-year ascent. Its motor insurance loss ratio declined by 4.6 percentage points to 77.6%. Long-term insurance loss ratio also fell by 22%.
Meanwhile, Hyundai’s net profits increased by 41.8% year-on-year to KRW282.2 billion (US$251.85 million).
Two smaller general insurers, Meritz Fire & Marine Insurance and Hanwha General Insurance, also posted net profit increases of 45.7% and 55.6% respectively.
Experts say that system improvements such as lower repair and rental costs of foreign vehicles have contributed to lower loss ratios in motor insurance, which is the largest contributor to general insurer earnings, reports Business Korea.
But despite the large boost in profitability, general insurers are worried that this might not last long. These firms are under pressure from the South Korean government to lower their premiums in order to alleviate the burden of insurance costs from the citizens. Hyundai and Dongbu reduced their motor insurance premiums last month, while Samsung has said that it is planning to follow suit.
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