Loss rate for auto insurance drops in 2020 amid pandemic

Non-life insurers' loss rate for their car insurance businesses dropped last year, thanks to fewer car accidents amid the COVID-19 pandemic, data showed Wednesday.

The nation's 12 non-life insurers posted an average loss rate of 85.7 percent last year, compared with 92.9 percent a year ago, according to the data by the Financial Supervisory Service (FSS).

The loss rate refers to the proportion of coverage a non-life insurer pays to its policyholders from insurance premiums. The higher the loss rate is, the more likely the insurer will suffer more of a burden.

Supported by the drop in loss rate, the non-life insurers reported a combined operating loss of 379.9 billion won ($335 million) last year, compared with a loss of 1.6 trillion won in 2019.

South Korea's auto insurance market grew 11.6 percent on year to 19.6 trillion won in 2020, the data showed. (Yonhap)