MOTOR

In 2019, direct premiums from motor insurance increased by 2.4% from the previous year. The main reasons for this result were premium rate increases resulting from loss ratio aggravation, and the growing popularity of online distribution channels. The loss ratio stood at 92%, up 6%p year on year. Key factors behind the deterioration were auto parts and repair cost increases, as well as a greater number of post-accident medical indemnity claims.

Our motor reinsurance business reported KRW 679.8 billion in gross written premiums in 2019, down 2.7% from a year earlier, with the loss ratio increasing by 7.2%p to 86.1%. In the domestic market, we maintained existing programs and covered higher risks along with both proportional and non-proportional treaties, and continuously provide solutions catering to the needs of direct insurers. We also saw an increase in transactions from mutual associations based on strengthened relationships with them. In overseas markets, we successfully acquired a greater number of profitable non-proportional treaties in the Mediterranean and Eastern Europe, thereby diversifying our business portfolio.

In 2020, the primary motor insurance market in Korea is expected to grow by 0.9%, to KRW 17.3 trillion, in direct premium income. Positive factors will be increasing car registrations and a reduction in premium discount offers, while online channel expansion is likely to limit premium volume growth. Fortunately, the loss ratio is anticipated to decline as gross premium growth in 2019 will lead to an earned premium increase in 2020.

In 2020, Korean Re, based on its downside outlook of the primary market, aims to achieve KRW 645 billion in gross written premiums, 1.4% less than the previous year. To achieve this goal amid a difficult market environment, we will increase the number of highly profitable non-proportional treaties and tighten up our current reinsurance conditions. Furthermore, we will do our best to build a solid overseas portfolio focused on diversity and profitability.