Insurance premiums are expected to rise consecutively starting next year, driven by worsening loss ratios in health insurance due to a surge in claims.
Auto insurance has also been under pressure since the second half of this year, affected by higher labour and parts costs, excessive claims related to traditional Korean medicine, and a sharp increase in accident expenses caused by natural disasters such as heavy rain. Without a premium adjustment, these losses are expected to continue into 2026.
According to the insurance industry and the Daishin Securities Research Centre, the recent push for premium hikes is not limited to specific diseases or seasonal factors but reflects a structural expansion of risk.
The long-term loss ratios of five major non-life insurers—Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, Meritz Fire & Marine Insurance, and Hanwha Non-Life Insurance—have been rising for five consecutive quarters since 2Q2024. Notably, claims across indemnity-based health insurance policies—including simple, comprehensive, dementia, and nursing care insurance—have been increasing simultaneously, significantly exceeding insurers’ projected loss ratios.
The steady decline in long-term insurance profit and loss ratios, along with falling contract service margin (CSM) profits since the implementation of IFRS 17, has added further pressure. The Financial Supervisory Service (FSS) has announced a 25-basis-point (0.25 percentage point) reduction in the published interest rate starting in 2026. This effectively lowers the expected interest rate benchmark, which in turn contributes to the need for higher premiums.
Industry experts also anticipate that price adjustments, particularly in health insurance, are inevitable. Insurers are expected to restructure products, reduce collateral, and adjust risk ratios beginning next year.