South Korea’s largest and second largest non-life insurer Samsung Fire & Marine Insurance Co. and Dongbu Insurance Co. reported stellar earnings for the third quarter thanks to big-data analysis of their clients’ driving habits that has helped significantly shave the loss ratio in their auto segment.

According to the security and insurance industries on Wednesday, the auto loss ratio of Samsung Fire was lowered from 85 percent last year to 76 percent, and Dongbu Insurance managed to make a greater cut from 92 percent to 77.3 percent over the same period. Loss ratio, an important performance identifier of insurance companies, is the ratio of total losses paid out to customers in insurance claims out of the total earned premiums. The lower the number, the better the earnings.

For auto insurance providers, the loss ratio should be kept below 78 to 79 percent just to break even. Last year’s high loss ratio reaching 88 percent on average was the main culprit behind the poor earnings of the nation’s non-life insurers. Their combined cumulative deficit in motor insurance sector exceeded 10 trillion won ($8.7 billion) in the first quarter this year.

Now, things have turned around. With the rising popularity of auto insurance products that provide different insurance premiums according to analysis on driving habits based on GPS-tracked records, the non-life insurance companies could have improved their performance significantly. Samsung Fire reported 331 billion won in operating profit for the third quarter ended September, up 44.3 percent from the same period last year. The operating profit of Dongbu Insurance soared 60.8 percent on year to 258.1 billion won over the citied period.

The impressive performance has also buoyed their stock prices. Shares of Samsung Fire that hit a 52-week low of 253,500 won on June 24 jumped 12 percent to close at 284,000 won Wednesday in Seoul trading. Dongbu Insurance’s stock price also climbed 13 percent from 61,900 won as of July 28 to 70,000 won Wednesday.

Market analysts see that this achievement may not be one-off. The big-data analysis would continue to help the firms stay ahead in the motor insurance sector and maintain their strong earnings.

Samsung Fire & Marine shares closed Thursday at 285,500 won, up 0.53 percent or 1,500 won from the previous session, and Dongbu Insurance closed at 69,900 won, down 0.14 percent or 100 won.

By Hong Jang-won

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