Buoyed by stellar performances last year, Korean nonlife insurers are considering cutting their car insurance premiums amid worries over high inflation, industry sources said Wednesday.

Industry leader Samsung Fire & Marine Insurance Co. recently sounded the Financial Supervisory Service, the local financial regulator, on its intention to slash insurance premiums by around 2 percent, according to the sources.

The FSS has begun looking into the possibility, examining other non-life insurers’ loss ratios and earnings to determine whether they are also capable of cutting down the premiums, they said.

A final decision will likely be made as early as next month, when the insurers announce their final yearly earnings for 2011, the FSS said.

Samsung Fire & Marine Insurance’s premium reduction could prompt other industry players to follow suit, the sources said.

It would mark the first markdown in car insurance premiums in four years. In August 2008, nonlife insurers lowered their car insurance premiums by 1.2-3.1 percent.

Such a move by nonlife insurers comes on the back of their record profit last year, estimated at 2.5 trillion won ($2.2 billion). The combined net profit of six companies reached 1.51 trillion won in the first three quarters of 2011, up 69 percent from a year earlier.

Industry watchers said the insurers seem to have been influenced by the government’s push to contain consumer inflation. Korea’s consumer prices grew 4 percent in 2011 from a year earlier. 

(Yonhap News)