Key facts
- South Korean insurers reported their first auto insurance loss in six years in H1 2026.
- The auto insurance business of 12 companies incurred a net loss of 185 billion won ($177 million).
- Overall profit for these insurers was 238 billion won, boosted by investment returns.
- The average loss rate for auto insurance rose to 84.9% in H1 2026.
- Increased insurance-related costs were cited as the primary reason for the losses.
- The number of auto accidents decreased by 4.5% to 1.74 million in the period.
SEOUL, Sept. 15 (Yonhap) -- Insurance firms in South Korea suffered their first loss from their auto insurance business in six years in the first half of the year due to increased costs, according to preliminary data from the Financial Supervisory Service (FSS).
The total profit of the 12 insurance companies that offer car insurance came to 238 billion won (US$177 million) in the January-June period, a decrease of 37.7 percent from a net profit of 382 billion won over the same period last year. This profit figure includes gains from their investments.
More specifically, their auto insurance business alone incurred a net loss of 185 billion won in the first half, marking the first such loss in six years. In contrast, their investment returns saw a 20.2 percent year-on-year increase, reaching 423 billion won during the same period.
The data also indicated that the average loss rate for auto insurance stood at 84.9 percent in the first half, an increase of 1.6 percentage points from the previous year. The loss rate signifies the proportion of insurance premiums that a non-life insurer pays out to policyholders. A higher loss rate generally correlates with a greater likelihood of an insurer operating at a deficit.
These losses in the auto insurance sector were primarily attributed to a rise in insurance-related costs. This occurred despite a 4.5 percent year-on-year decrease in the number of accidents, which fell to 1.74 million during the cited period.