Hyundai Marine & Fire Insurance Co., one of South Korea’s major non-life insurers, has decided to join the move of other industry players to lower auto insurance premiums amid ongoing efforts by the new government to shave the consumer burden of high insurance costs.

Hyundai Marine & Fire Insurance said on Friday that it will cut its auto insurance premiums for individual and corporate users by 1.5 percent, respectively, for contracts taking effect as of August 21.

The move comes after industry rival Dongbu Insurance Co. announced last week that it will lower its auto insurance rates for corporate and business users by 1.3 percent and for individual users by 0.8 percent. The reduction by Hyundai Marine & Fire Insurance is almost double that of Dongbu Insurance based on the rate for individual users.

An unnamed official from Hyundai Marine & Fire Insurance said the company’s decision comes as the number of car accidents is on a steady fall and the overall auto insurance system has improved. Coupled with them, fewer natural disasters compared to the past have allowed its loss ratio to improve, leading to the cut in auto insurance premiums, the official added.

The company’s combined ratio that measures profitability by comparing incurred losses to operation expenses stood at 97.6 percent as of end of May. This means that the company earned $2.4 in profit by selling auto insurance worth $100.

Korea’s other major non-life insurers are also expected to follow the move to lower auto insurance premiums amid growing pressure by the country’s new government to cut casualty insurance premiums. Market watchers believed that insurers would opt for special discounts on auto insurance premiums to avoid a cut in casualty insurance premiums with higher loss ratio.

Samsung Fire & Marine Insurance Co., the country’s top non-life insurer that already cut its auto insurance premiums in the end of last year, is said to be mulling an additional reduction in the rate. KB Insurance Co. will also likely follow suit.

By Park Joon-hyung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]