An imported automobile sits broken close to Gangnam subway station, southern Seoul, on Wednesday morning (Yonhap)
Insurance coverage firms face expensive claims for harm protection for almost 8,000 flooded automobiles — amongst which at the very least 2,500 are from luxurious manufacturers — after heavy rain battered Seoul and Gyeonggi Province this week.
In accordance with the Common Insurance coverage Affiliation of Korea, 12 vehicle harm insurance coverage firms obtained a complete of seven,678 claims for flooded automobiles as of 1 p.m. Wednesday,
The variety of claims for flooded imported luxurious automobiles obtained by the nation’s 4 largest insurance coverage firms — Samsung Fireplace & Marine Insurance coverage, DB Insurance coverage, Hyundai Marine & Fireplace Insurance coverage and KB Insurance coverage — reached 2,171.
The estimated claims quantity to 97.76 billion received ($74.59 million). Among the many broken autos are luxurious automobiles such because the Mercedes-Benz S class, Porsche Panamera, Bentley and Ferrari fashions – which may price lots of of thousands and thousands of received.
Insurers are prone to face strain from regulators as authorities mentioned on Wednesday afternoon that they might have the Monetary Companies Fee monitor whether or not the compensations are processed promptly.
“Having obtained almost 8,000 claims for flooded automobiles in two days is unprecedented,” mentioned an official from an insurance coverage firm.
Insurance coverage firms often estimate compensation for flooded automobiles to face at round 10 million received per automobile, however protection can be costlier this time because the rainfall concentrated within the prosperous Gangnam space that’s house to many costly automobiles.
Because of this, insurance coverage firms held emergency conferences Tuesday to give you methods to deal with the hefty claims.
Some are reportedly contemplating growing automobile insurance coverage premiums.
“As protection for imported automobiles is dear, this might have an effect on the loss ratio for the insurance coverage firms,” mentioned one other official from an insurance coverage firm.
The loss ratio is a ratio of losses paid out to premiums earned, expressed as a proportion.
A excessive loss ratio may be an indicator of monetary misery for an insurance coverage firm.
The loss ratio of insurance coverage firms had been saved beneath 80 p.c till July however because of the current flooded automobile protection, the determine is prone to be raised. Inventory costs of insurers have been falling since Tuesday because the market expects them to must foot the exorbitant invoice.
Samsung Fireplace & Marine Insurance coverage shares on Wednesday closed at 203,500 received, 0.97 p.c decrease than Friday’s session and DB Insurance coverage at 62,900 received, 2.63 p.c decrease.
By Hong Yoo (yoohong@heraldcorp.com)