Large damage insurance companies, in the first quarter of 2026, the auto insurance loss ratio rose to 85.9%

The auto insurance loss ratio for large damage insurance companies significantly increased in the first quarter of 2026 compared to last year, indicating a further deterioration in auto insurance profitability.

According to industry sources on the 22nd, the combined loss ratio of four major companies—Samsung Fire & Marine, Hyundai Marine & Fire, DB Insurance, and KB Insurance—averaged 85.9% in the first quarter of this year. This is a 3.4 percentage point increase from the same period last year. Looking specifically at March, the loss ratio reached 81.5%, up 4.0 percentage points from a year earlier. The loss ratio indicates how much of the premiums collected from policyholders are paid out as claims; generally, the higher the ratio, the worse the profitability for the insurer.

March is typically considered a period of relatively stable loss ratios due to seasonal factors, but this year it exceeded the 80% break-even point. This is interpreted as, although insurers have partially reflected a 1% moderate premium increase this year, the effects of four consecutive years of premium reductions still persist. Slow premium adjustments, combined with the potential for rapid increases in claims payments due to changes in accident frequency and repair costs, may create a time lag that leads to rising loss ratios.

Cost burdens are also continuing to grow. The industry believes that increased spring travel leads to more vehicle movement, which could raise accident rates. Additionally, rising costs of auto parts, labor for repairs, and the persistent issue of over-treatment of minor injury patients are factors that are believed to push up loss ratios. Minor injury patients refer to those with relatively mild injuries; if their treatment duration is prolonged or excessive, the insurance payout burden may exceed expectations.

Ultimately, the auto insurance market reveals that relying solely on premium adjustments is insufficient to defend profitability structurally. This is due to the combined effects of accident frequency, vehicle repair costs, medical expenses, and other cost factors. This trend is likely to continue in the short term, and damage insurance companies are expected to not only strengthen premium policies but also enhance cost control strategies such as damage management, medical expense review, and repair cost savings.