Published : 2013-01-02 19:25
Updated : 2013-01-02 19:25
South Korean nonlife insurers are expected to post poor business performances for the 2012 fiscal year due to increased loss rates amid the country’s cold weather, industry data showed Wednesday.
The average loss rate for the country’s top four nonlife insurers hovered above 90 percent in December, surpassing the industry’s break-even point of 77 percent, according to the data.
The loss rate refers to the proportion of coverage a nonlife insurer pays to its policyholders from insurance premiums. The higher the loss rate is, the more likely the insurer will go into the red.
South Korean nonlife insurers reported a loss rate of 100 percent on average in December, up 11 percentage points from a month earlier, the data showed. Smaller nonlife insurers, such as ERGO Daum Direct Auto Insurance Co., reported a whopping 120 percent.
“Loss rates gradually increased since July on the rising number of car accidents, while the figures jumped in December on the heavy snow and cold wave that struck the country,” an official from the General Insurance Association of Korea said. (Yonhap News)