Samsung Fire & Marine Insurance Co., South Korea's top non-life insurer, said Wednesday it will cut its auto insurance premiums by an average 1.2 percent in April on falling loss rates.

It will mark Samsung Fire & Marine Insurance's first premium reduction since 2020, when its car insurance premium increased more than 3 percent amid soaring deficits.

Samsung Fire & Marine Insurance, the non-life insurance arm of top conglomerate Samsung Group, said it has made the decision as its auto insurance loss rate improved thanks to fewer car accidents amid the COVID-19 pandemic.

The loss rate refers to the proportion of coverage a non-life insurer pays to its policyholders from insurance premiums. The higher the loss rate is, the more likely insurers will suffer more of a burden.

The move by Samsung Fire & Marine Insurance Co. is widely expected to prompt other major industry players -- Hyundai Marine & Fire Insurance Co., DB Insurance Co. and KB Insurance Co. -- to follow suit.

The four major industry players control around 85 percent of the country's auto insurance market.

Last year, the four firms' loss rates were estimated to range from 79.6 percent to 81.5 percent. Their break-even loss rate is known to be about 80 percent.

In January 2020, local non-life insurers jacked up their auto insurance premiums by 3.3-3.5 percent amid growing losses.

Last year, however, those firms posted their first profits from the car insurance segment in four years amid the prolonged coronavirus pandemic, leading to a call for cuts in their premiums. (Yonhap)