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| Cars are flooded at a residential area in the nation's southeastern city of Pohang, Tuesday. Yonhap |
By Lee Min-hyung
Local non-life insurers lost tens of billions of won, as more than 6,000 vehicles here were damaged during Typhoon Hinnamnor's rampage across the southern regions of the peninsula.
According to data from the industry, a total of 6,762 cars were damaged by floods as of 3 p.m. Thursday. The damage is worth 54.6 billion won ($39.6 million), according to data compiled by the General Insurance Association of Korea and the nation's 12 general insurers. But the figure is expected to rise higher, as restoration is still underway in flood-hit areas.
The top four non-life insurers including Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance have received car damage reports worth a total 40.64 billion won from customers due to the typhoon.
But as the insurers signed reinsurance agreements to insure themselves in case of emergency or on natural disaster, the loss is unlikely to come as a serious risk to them, according to data from the Financial Supervisory Service.
The watchdog said recently that non-life insurers' losses over flood damage to vehicles in August fell sharply due to reinsurance. Data from the authority showed that the total damage to cars hit by heavy floods last month reached a value of 141.6 billion won, but insurers are estimated to have suffered a loss of merely 40 billion won.
On top of that, insurers chalked up record earnings in their vehicle insurance business in the first half of this year, as 12 non-life insurers reported a combined operating profit of 626.4 billion won, up 51.4 percent from the previous year.
But the industry expected the insurers will have to bear additional reinsurance costs when renewing contracts.
"Even if the scale of loss appears to be downsized temporarily due to the reinsurance, insurers will end up paying more when extending their existing reinsurance," an industry source said.
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