South Korea's non-life insurers saw their combined net profit fall by 17% during the January to June period this year compared to the previous year, hit by the increased losses in insurance operations, in particular, in motor insurance.
The combined net profit of the local non-life insurance companies in the first half of this year amounted to KRW2.1trn ($1.9bn), reports Pulse News citing data from the Financial Supervisory Service.
The fall was mainly attributable to the rising losses from underwriting operations, including general, auto and long-term insurance, that surged by 48% to KRW1.1trn. Their combined profit from investments rose by 8.3% to KRW4.03trn over the same period.
The non-life insurers saw their motor insurance business swing to the red in 1H2018 with a combined operating loss of KRW3.1bn, due to the increased insurance payouts amid unusual heavy snow and cold wave in February.
Industry watchers predict the auto insurance business would suffer a growing loss in the second half as well, due to an increased number of vehicle accidents amid the unprecedentedly long scorching heat that hit the country during the summer.
To offset anticipated losses, non-life insurance companies are expected to hike motor premiums later this year.