Motor

In 2018, the motor insurance market contracted, with premium income decreasing by 1.5 percent from the previous year. One of the main factors behind this reduction was premium rate cuts amid benign weather experience and the growing popularity of online distribution channels. Although there were no catastrophic losses, the market saw its loss ratio rise by 5.1 percentage points year on year to 85.9 percent due to seasonal losses arising from heatwaves and typhoons. The aggravation in loss ratio was also caused by an increase in expenses involving sales costs, as insurers were driven into fierce competition to boost market shares.

Despite these challenging market conditions, we delivered stable results for 2018, with the loss ratio of our motor business falling slightly to 76.7 percent. We reported KRW 698.5 billion in gross written premiums in 2018, up 2.3 percent from the year before. In the domestic market, we maintained existing programs covering higher risks along with both proportional and non-proportional treaties. We focused on offering reinsurance solutions that meet the varying needs of our clients. Our business with cooperatives and mutual associations continued to increase, supporting the growth of our domestic business. In the overseas markets, we succeeded in increasing the level of diversification of our business portfolio by expanding into new markets in the Mediterranean and Eastern Europe.

In 2019, the motor insurance market in Korea is expected to grow by 0.5 percent to KRW 17 trillion in premium income. Both positive and negative factors will come into play in terms of pricing. The increasing popularity of usage-based pricing plans and the trend of driving less may lower the rates, dragging on the growth of the market, while a rise in repair costs and growing claims driven by abnormal weather conditions will help boost premium rates. Another positive factor would be an increasing number of car registrations following a decline in excise tax.   

With the primary motor insurance market remaining sluggish, Korean Re aims to achieve the same level of growth in 2019 as in the previous year, with an estimated premium income of KRW 698.5 billion. We will build reinsurance programs designed to cover newly emerging risks, while seeking to further diversify our overseas portfolio so that it can generate stable returns. 

Gross Written Premiums: Motor

(Units: KRW billion, USD million)