Competition, low premiums pull down Korean auto insurance

August 13 2018 by InsuranceAsia News Staff

Stiff competition and lower premiums are the two main reasons why the auto insurance market of Korea saw a contraction during the first half of the year, the Financial Supervisory Service (FSS) said.

From January to June, the car insurance market contracted to W8.4 trillion (US$7.5 billion), a dip of 1.2% on-year, FSS data showed.

As for non-life insurers, their loss rate for auto insurance businesses increased 3.9 percentage points to 81.7% during the same period.

During the period, it is believed that more drivers turned to online channels for buying insurance, where the premiums offered are much lower, and the platform is more convenient to customers.

The Korea Insurance Development Institute noted that about a fifth or 20.5% of the nation’s 15.4 million car insurance policyholders filed their applications via cyber marketing channels in June last year alone.

MORE FROM: South Korea