Insurance Premiums for Cars Expected to Rise by 5 % Next Month

With damage insurance companies paying more insurance money to policy holders, their net profit in July dropped to half the level over the same period of last year.

As a result, damage insurance companies are planning to increase insurance premiums for cars by about 5 percent next month. According to the Financial Supervisory Commission and the damage insurance industry, 10 damage insurance companies recorded 49.1 billion won in net profit in July on insurance premiums of 1.623 trillion won. Income from insurance premiums increased by 39.4 billion won over the same period last year while net profit decreased by 42.2 billion won.

Samsung In terms of net profit in July, Samsung fire insurance ranked first with 27.4 billion won, followed by Dongbu fire insurance with 10.1 billion won, Hyundai marine and fire insurance with 5.5 billion won and Dongyang fire insurance with 2.2 billion won.

Ssangyong fire insurance (1.5 billion won), Jeil fire insurance (1.4 billion won), Daehan fire insurance (1.2 billion won) also made profits while Green fire insurance and Sindonga fire insurance reported losses of 1.1 billion won and 500 million won respectively. Net profits of damage insurance companies decreased drastically despite increase in income from insurance premiums as larger amounts of life insurance money were paid to policy holders in an increasing number of accidents.

As for car insurances, the ratio of paid insurance money paid to insurance premiums increased from 65% last July to 74 % this July. In other words, damage insurance companies paid 74 won in insurance money from 100 won they received from policy holders.

Chi-Young Shin higgledy@donga.com