Korea bound for greener pastures in 2024, 2.6% growth projection

Non-life market to beat life sector in premium volume.

Korea’s insurance industry is expected to surge 2.6% this year, rebounding from the contraction recorded in 2023, Korean Re reported.

Based on an outlook report by the Korean Insurance Research Institute, premiums will reach $190b.

“The life insurance market is expected to return to positive growth in 2024 after experiencing a sharp contraction in 2023. The non-life insurance market is likely to surpass the life insurance sector in terms of premium volume, as the market is projected to continue growing in 2024, albeit at a more moderate pace compared to the previous year,” Korean Re said in a release.

The life insurance sector, after a significant drop in 2023, is predicted to see a 0.6% increase in premium income to $89b, driven by a 2% growth in protection-type insurance like health coverage, spurred by heightened risk awareness post-COVID-19. 

However, savings life insurance is expected to decline by 6.6%, as rising bank interest rates make them less appealing.

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The non-life insurance market, showing more resilience, is likely to grow by 4.4% to $100b, with long-term personal accident, health, and general property and casualty insurance being key growth drivers. 

The motor insurance market is expected to grow modestly by 1.8%, affected by lower-priced online insurance options. General property and casualty insurance is set to grow by 5.2%, particularly due to an increased focus on liability insurance.

Likewise, contract service margin (CSM) is bound to sustain its growth for both sectors this year, with an estimated jump to $52b and $48b, accordingly. This signals a profitable for insurers, Korean Re said.

“However, there is an expectation of considerable volatility in investment income. Since the implementation of a stringent monetary policy in 2022, profitability deviations among insurers have widened, and this trend may persist into 2024 due to the prolonged period of high-interest rates. With the anticipated high volatility in financial markets, an insurer’s profit size may fluctuate, contingent upon its capabilities in managing investment income,” the statement added.

(KRW1.00 = $0.00075)