Korean financial regulatory authorities plan to ease licensing regulations for the insurance industry by lowering minimum capital requirements for insurers dealing in special lines. A mono-line insurer may be established with a minimum capital of KRW 1-3 billion according to industry sources. This will help promote the development of the market for small-amount and short-term insurance products such as pet, travel and bicycle insurance. Currently, the minimum capital for a multi-line insurer is KRW 30 billion, although it may vary depending on the business lines it is authorized to deal with. The minimum capital for a direct writer, which writes business mostly by telephone, mail or the internet, is two-thirds of the amount applicable to an equivalent multi-channel writer.
Lower capital requirement means easier market entry for mono-line or specialist insurers. This may help diversify the insurance market, which is comprised mainly of multi-line insurance companies. As of 2016, 99.5 percent of life insurance assets in Korea belong to insurers licensed to engage in all lines of business, while 92 percent of non-life assets come from all-line insurers. A more diversified insurance market is expected to better serve insurance consumers as more affordable and customized products become available to consumers.