Motor insurance was the largest segment in the South Korean general insurance industry, accounting for 35.5% share in terms of gross written premiums (GWP) in 2020. Top four motor insurers continue to dominate the market with 84.3% market share in 2020, which grew from 79.0% in 2016, finds GlobalData, a leading data and analytics company.

According to GlobalData’s Insurance Intelligence Center, motor insurance segment grew by 11.7% in 2020, driven by increase in premium rates and surge in registered motor vehicles.

Samsung Fire and Marine led the motor insurance market with 29.5% share in 2020, followed by Hyundai Marine and Fire at 20.8%. DB Insurance with 20.6% share and KB Insurance with 13.3% make the top four.

Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: “Higher sales and business efficiency of top four insurers due to brand power and economies of scale has reduced the profitability of small and medium sized insurers. The top four insurers registered an average loss ratio of 91.7% in 2019, lower than the industry average of 92.9%, whereas other insurers registered an average loss ratio of 100.7%.”

To keep loss ratio under control, small and medium-sized insurers increased motor insurance premiums in 2020.  This weakened their price competitiveness and led to further reduction in their market share in 2020.

Mr Sahoo adds: “Despite rapidly growing demand for electric vehicles, most insurers are reluctant to develop specialized motor insurance products for electric vehicles due to high cost for repair and parts of these vehicles than those for ordinary cars.”

Among the top four insurers, only Samsung Fire and Marine and DB Insurance offer specialized motor insurance for electric vehicles.

Mr. Sahoo concludes: “Growing electric vehicles sales and the launch of Level 3 autonomous vehicles will support the growth of motor insurance sales in the next few years. Pricing competitiveness is expected to increase the share of top four insurers and lead to further concentration in the South Korean motor insurance industry.”