Auto Insurance Loss Ratio at 84.3%, Reflecting Flood Damage in August

The average loss ratio for auto insurance among five major domestic property and casualty insurers from January to July was recorded at 84.3%. This figure represents an increase of 0.3 percentage points compared to the same period last year. For the month of July alone, the loss ratio was 85.9%, which is 6.2 percentage points lower than the same month last year. The loss ratio for auto insurance is the percentage of premiums received by the insurer that are paid out as claims, and a higher loss ratio indicates weakened profitability for the insurer. The reason the July figures did not deteriorate significantly is attributed to the influence of premiums and seasonal factors. In February of this year, premiums were slightly increased, and last July saw concentrated damage from heavy rains, whereas this year, the concentrated heavy rainfall occurred in August along the southern coast. The flood damage in August will be a variable reflected in the next loss ratio indicators, with 2,505 vehicles affected by the flooding and an estimated loss amounting to approximately 22.9 billion won. The loss ratio is determined by various factors including accident frequency, vehicle repair costs, maintenance fees, and the flow of medical expense claims, and it can fluctuate during the summer months. The '8-week rule' system will be implemented next month, which may act as a variable affecting the loss ratio related to the long-term treatment management of patients with ongoing conditions. The loss ratio for August is expected to reflect the impact of the concentrated heavy rainfall along the southern coast and accident factors related to the vacation season.

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