South Korea's biggest nonlife insurer, Samsung Fire & Marine Insurance, is facing pressure to cut its car insurance premiums as the Seoul-based company chalked up big profits in the first quarter of this year.
According to the General Insurance Association of Korea (GIAK), 11 non-life insurers posted a KRW90.7 billion (US$80.86 million) operating profit from their motor insurance business in the first quarter. It was a turnaround from a combined KRW57.6 billion in operating losses a year before, reported The Korea Times.
Samsung Fire alone recorded KRW45.8 billion in operating profit from motor insurance, up from KRW8.2 billion a year earlier. Five other firms also posted a combined surplus of KRW44.9 billion. They were: Hyundai, Dongbu, AXA General Insurance, Hanwha General Insurance and The K Non-Life Insurance.
According to the Financial Supervisory Service (FSS), the loss ratio of domestic insurers in car insurance improved to 78% in the first quarter, compared to 82.2% a year earlier.
An executive at Samsung Fire said: "The improved profits do not necessarily mean the company's car insurance premiums are high.
"The increase in premium revenue came as the market has expanded and various riders were added. Compared to other non-life insurers, Samsung Fire's car insurance premiums are not that high."
Regarding more premium cuts, the official said the company is "monitoring the market situation".