South Korea's auto insurance market faces the paradox of deteriorating profitability despite outward growth. Although revenue exceeded 10.6 trillion won driven by premium hikes and an increase in insured vehicles, rising loss ratios and expense ratios pushed insurance underwriting results back into a deficit for the first time in six years.

■ Revenue up 4.2%... Insured vehicles reach 25.96 million According to the Financial Supervisory Service, auto insurance gross written premiums in the first half of 2026 totaled 10,638.4 billion won, up 426.9 billion won (4.2%) from 10,211.5 billion won in the same period last year. Market expansion and an average 1.3% premium increase implemented early this year drove the revenue growth. The number of insured vehicles also continued to rise, growing from 25.51 million in the first half of 2024 and 25.75 million in the first half of 2025 to 25.96 million in the first half of this year — an increase of 210,000 vehicles (0.8%) from a year earlier.

■ Loss and expense ratios rise together... combined ratio of 101.9% exceeds break-even point However, the revenue growth did not translate into improved underwriting profitability. The auto insurance loss ratio in the first half of this year was 84.9%, up 1.6 percentage points year-on-year, while the expense ratio rose 0.6 percentage points to 17.0%. The combined ratio stood at 101.9%, up 2.2 percentage points from the same period last year and exceeding the typical auto insurance break-even threshold of 100% by 1.9 percentage points. As a result, insurance underwriting results recorded a deficit of 184.8 billion won, swinging to a loss for the first time in six years as profits fell 215 billion won from a 30.2 billion won surplus in the first half of last year.

■ Investment income up 20.2%, but total profit down 37.7% Investment returns partially offset the underwriting losses. Investment income in the first half of this year was 422.8 billion won, up 71 billion won (20.2%) from 351.8 billion won a year earlier. However, total profit, combining underwriting and investment results, came to only 238 billion won, down 144 billion won (37.7%) from 382 billion won in the first half of last year. Despite expanded investment gains, the larger underwriting deficit worsened overall profitability.

■ Top 4 P&C insurers hold 84.8% share... oligopoly persists The market remained dominated by large insurers. Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, and KB Insurance held a combined market share of 84.8%. Although down 0.2 percentage points from a year earlier, the four still accounted for more than 80% of the entire market. Mid-sized insurers' share rose 1.6 percentage points year-on-year to 11.0%, reflecting factors such as the merger of Hanwha General Insurance and Carrot General Insurance in October last year. Meanwhile, the share of non-face-to-face specialized insurers fell 1.4 percentage points to 4.2%.

The first-half results this year confirmed both revenue expansion and deteriorating profitability. Gross written premiums grew on premium hikes and more insured vehicles, but rising loss and expense ratios swung underwriting results into a deficit. Despite higher investment income, total profit fell 37.7%, leaving the recovery of auto insurance underwriting profitability as a key task ahead.

[Preliminary figures are subject to change during the finalization process. This article was written with partial AI assistance.]