South Korea’s non-life insurers suffered massive losses from their car insurance business in the fiscal first half as heavy summer downpours led to a surge in claims, watchers said Wednesday.
The combined net loss of 14 local non-life insurers’ auto insurance businesses reached 108.3 billion won ($959.1 million) in the April-September period, according to industry data. Local insurers close their books on March 31.
The losses were mostly attributed to severe flooding in July that swamped thousands of cars and incurred a net loss of around 56.3 billion won.
The Financial Supervisory Service, the country’s financial watchdog, said earlier that the number of monthly car insurance claims reached a fresh high in July. A total of 11,362 reports of car damage were received during the month, which translated to around 80.1 billion won in compensation to policyholders.
Meanwhile, the average loss rate of non-life insurers has stayed at a 70 percent level after hitting 83.5 percent in January.
A higher loss rate weighs down insurers’ profits.
Watchers said the figure stabilized after hovering around the 80 percent level in fiscal 2010 but may again rise in the coming months due to a rise in accidents during the winter season.