OLDWICK, N.J.–(BUSINESS WIRE)–In this episode of AMBestTV, Chanyoung Lee, senior financial analyst, AM Best, said deteriorating loss ratios and escalating pressure on investments are challenging the South Korea non-life insurance market. Click on http://www.ambest.com/v.asp?v=ambsouthkoreaoutlook620 to view the entire program.
Lee discussed the trends that have negatively impacted the South Korea non-life market.
“In the overall industry, net income dropped by 40% last year mainly because of increasing claims in the long-term and automobile insurance lines, which are the two major business lines in South Korea’s non-life sector,” said Lee. “For automobile insurance, which accounts for about 20% of total direct premiums, there were multiple factors that drove loss costs up in recent years, including a hike in repair costs, a rise in the minimum wage and growing claims from medical treatment. For the long-term insurance line, which is the largest business line in South Korea’s non-life sector, the main driver for the increased loss ratio was the surge of claims in the medical indemnity coverage, which accounts for about one-third of the total risks premium.”
Lee also addressed how non-life insurers are holding up against the pandemic.
“In South Korea, AM Best expects the impact of COVID-19 on the non-life insurers’ underwriting side to be minimal. Sales have been and will be inevitably disrupted for a while, especially in the face-to-face sales channels. AM Best did not see much decline in new business in the first quarter, but does expect to see an impact in the second quarter. Additionally, the impact on the overall top-line for premium income will not be material because of the large, recurring premium base of the long-term insurance line.”
To access the related market segment report, titled, “Market Segment Outlook: South Korea, Non-Life,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=297360.
- Insurers Brace for ‘Above Normal’ Hurricane Season, Less Data for Forecasts: Tom Varney, ARC regional manager, Allianz Global Corporate & Specialty, and Marla Schwartz Pourrabbani, national catastrophe specialist, Swiss Re, discuss the 2020 hurricane season, saying that with commercial flights grounded due to the pandemic, forecasters will have less data for predictions: http://www.ambest.com/v.asp?v=hurricaneseason620.
- Fewer Claims Than Expected Mute COVID-19 Impact on Health Insurers’ First-Quarter Earnings: Sally Rosen, senior director, and Joe Zazzera, director, both of AM Best, said more patients recovering at home resulted in lower-than-expected health insurance claims: http://www.ambest.com/v.asp?v=ambhealth620.
- California Earthquake Authority Managing $21 Billion Wildfire Backstop for Utilities: Glenn Pomeroy, chief executive officer, California Earthquake Authority (CEA), a nonprofit, said CEA is now managing a $21 billion Wildfire Fund backstop for utilities: http://www.ambest.com/v.asp?v=pomeroy620.
- COVID-19 Pandemic Struck MPL Market at ‘Weakest Point’ in Two Decades: At the State of the Medical Professional Liability Market webinar, participants discussed the implications of the pandemic hitting the market following a combined ratio of 113.3 in 2019: http://www.ambest.com/v.asp?v=mplirecut620.
AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at www.ambest.com/multimedia/ambtvsignup.html. View AM BestTV episodes at www.ambest.tv.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Group Vice President, Publication and News Services
+1 908 439 2200, ext. 5561