Major non-life insurance companies in South Korea are preparing to raise auto insurance premiums for the first time in five years, amid higher loss ratios, increased accident volumes, and ongoing changes in the motor market. The move comes as the country’s motor insurance segment is forecast to grow over the medium term, supported by rate adjustments and continued vehicle sales.
According to The Asia Business Daily’s report, industry sources say four major non-life insurers – Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance – have completed premium verification with the Insurance Development Institute and decided to implement rate increases of about 1.3% to 1.4%. Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance are expected to apply increases of around 1.4%, while DB Insurance plans to raise prices by roughly 1.3%. KB Insurance is also preparing changes within a similar range. The revised tariffs are scheduled to take effect from February and will apply to both new policies and renewals.
This will be the first increase in Korean private motor premiums since 2021, ending a five-year period without rate changes in this line. As of 2024, the average annual auto premium in South Korea stood at about KRW692,000. With the new pricing, the typical annual cost per policyholder is projected to rise by around KRW9,000. For insurers across Asia tracking personal motor portfolios, the shift in South Korea follows several years of cost pressure amid rising claims and limited pricing flexibility.
Motor insurance is a major line in South Korea’s non-life sector. Comprehensive motor policies account for roughly 87% of total motor premiums, while third-party liability products make up the remaining 13%. This structure indicates the large share of own-damage and bundled covers in the overall portfolio. The motor line is the largest component of the general insurance market, contributing more than half of total non-life premiums in 2024. For regional insurers and reinsurers, developments in Korea offer insight into how a relatively advanced motor market is adjusting pricing, product mix, and underwriting approaches in response to shifts in risk and regulation.
Despite margin pressure, the motor insurance market in South Korea is expected to grow over the next several years. Market analysis by GlobalData projects that motor gross written premiums (GWP) will reach about KRW25 trillion (US$18.6 billion) by 2029, up from a projected KRW20.9 trillion (US$15.6 billion) in 2025, implying a compound annual growth rate of around 4.5%. GlobalData identifies several factors behind this outlook, including a recovery in third-party liability cover, an increase in new vehicle registrations, and the effect of premium rate adjustments. These elements are expected to support growth in written premiums even as competitive and regulatory conditions influence pricing decisions.
Swarup Kumar Sahoo, senior analyst at GlobalData, said insurers are adjusting their motor portfolios to reflect shifts in technology, driving patterns, and macroeconomic conditions. “The South Korean motor insurance market is expected to grow with an increase in premium price, high premiums for EVs, a rising share of EVs, and increasing traffic accidents. However, the growth will be slower due to the growing popularity of usage-based insurance and an expected increase in the unemployment rate due to the US tariff on automobile imports,” Sahoo said.
Higher loss ratios have been a key factor behind the latest pricing decisions. Data from the Financial Supervisory Service indicate that, as of November 2024, the average motor insurance loss ratio for the top four non-life insurers reached 92.4%, up from 81.5% a year earlier. The increase reflects pressure from both claims frequency and severity. Traffic accident data show a similar pattern. Reported accidents rose from 1.78 million in the first half of 2023 to 1.84 million over the same period in 2024. For carriers, the rise has contributed to higher claims costs and thinner technical margins after a period of largely flat pricing.
South Korea’s longer-term policy goal of achieving 100% electric new vehicle sales by 2040 is affecting how insurers price and structure motor products. EV policies typically carry higher premiums than those for internal combustion engine vehicles, reflecting differences in risk characteristics and repair cost profiles, including battery-related work and specialized diagnostics. At the same time, the growing use of usage-based insurance (UBI), supported by telematics and connectivity, is changing approaches to underwriting and risk selection. While UBI allows more granular pricing based on driving behaviour, it can also intensify competition as insurers use data to target specific segments. Digital distribution platforms are adding further pressure in personal motor, where comparison and direct channels can make pricing more sensitive and transparent.
For insurers and intermediaries across Asia, developments in South Korea show how premium adequacy, EV-related risk, and data-driven pricing are affecting a core retail line. The upcoming premium increases by major Korean non-life carriers indicate how one of the region’s larger motor markets is adjusting pricing and products in the context of regulatory targets, technology change, and evolving customer expectations.
