South Korea premiums to swell to $229.5b by 2025

Life segment to revive in 2022, driven by increased awareness.

South Korea’s insurance industry is projected to grow at a compound annual growth rate of 3.5% to KR₩262.5t ($229.5b) in terms of direct written premiums (DWP) in 2025 according to projections by GlobalData.

GlobalData Insurance Analyst Anjuli Srivastav said that after growing by 4.2% in 2020, the industry is expected to contract by 0.4% in 2021, with the decline mainly driven by the life insurance segment, which is expected to contract by 2.5% due to the persistent low-interest-rate environment, reduced disposable income due to the COVID-19 pandemic, and an ageing population.

Life insurance accounted for 54% of the industry’s DWP in 2020. The segment is expected to revive in 2022 and grow by 1.9%, driven by post-pandemic economic recovery and increased awareness, which will boost the demand for health insurance products.

Meanwhile, the general insurance segment accounted for the remaining 46% of the DWP in 2020. The segment grew by 7% in 2020, driven by an increase in motor premiums and improved underwriting performance of general insurers. However, it is expected to witness a slower growth of 3.8% in 2021 due to the economic impact of the pandemic.

GlobalData observed that South Korean insurers’ initiatives to divest from high-risk non-renewable energy projects and invest only in renewable energy will support their underwriting performance in the coming years.

Several insurers, like Hyundai Marine & Fire Insurance, Hana Insurance, DB Insurance, and Hanwha General Insurance, have pledged to stop providing construction and operational insurance coverage to any new coal projects.