CAR INSURANCE FEES EXPECTED TO DROP

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Massive floods that inundated thousands of cars last summer raised concerns over an increase in car insurance premiums. But an estimate of car insurance companies' earnings in 2022 has revealed that their profits could actually improve compared to the previous years, meaning drivers may pay less premiums next year.

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Some 6,700 cars nationwide were inundated when Typhoon Hinnamnor hit Korea in September. In August, Seoul's Gangnam area bore the brunt of torrential rains in the capital region. More than 18,000 reports of damage were filed to insurance companies following the unprecedented rains. As insurance companies' payments soared, consumers were concerned they might have to pay more in car insurance premiums. However, the insurance sector has promised to consider cutting insurance premiums. The decrease will likely be in the upper one percent range.

[Soundbite] (Insurance industry source(VOICE MODIFIED)) : "There are still reasons to raise insurance premiums, but we are considering lowering them to alleviate people's financial burden."

Insurance firms say they want to alleviate consumers' financial burden amid high inflation, but their earnings show they can afford to lower premiums. Their operating income in the car insurance sector recorded an all-time high in the first half of 2022. Counter to public concerns, insurers' business losses related to inundated cars were found to be just 40 percent of the initially expected amount. As of September, their loss ratio did not surpass the break-even point of 80 percent.

[Soundbite] Seo Dong-yeol(Seoul Resident) : "We would welcome any decrease in premiums because gas and everything else are expensive these days."

Insurance firms slashed car insurance premiums by up to 1.4 percent early this year for a similar reason. They announced their plans in February and the insurance premiums were cut two months later.