Korean Insurance Market Outlook for 2024

The insurance market in Korea is anticipated to rebound in 2024, with an expected growth rate of 2.6%, following a period of negative growth in 2023. According to an outlook report released by the Korea Insurance Research Institute in October 2023, the total premiums are forecast to reach KRW 253.8 trillion. 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.



The contract service margin (CSM) in the insurance industry is expected to maintain its growth trajectory for both life and non-life insurance in 2024. The CSM for life insurance is estimated to increase to KRW 69.9 trillion in 2024 from KRW 61.9 trillion in 2023. Similarly, the approximate CSM size for non-life insurance is projected to be KRW 64.6 trillion in 2023 and KRW 67.9 trillion in 2024, based on estimates for 11 domestic general non-life insurance companies.

The robust growth of the CSM suggests a potential increase in profits of insurers. 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.



Life Insurance

The life insurance market is expected to recover in 2024 after declining steeply in 2023, with premium income forecast to grow by 0.6% to KRW 120 trillion in 2024. Premiums from protection-type insurance are projected to grow by 2% because sales of health insurance remain robust. The COVID-19 pandemic has become a driving force behind rising risk awareness and demand for health insurance coverage. This will provide a greater boost to insurers' marketing initiatives to increase protection-type products under the new regulatory frameworks of IFRS 17 and K-ICS. However, a limited economic recovery may have a negative impact on insurance sales growth as fewer consumers will have extra money to spend on insurance.

Savings life insurance premiums are projected to fall by 6.6% as life insurers will continue to focus on selling protection products. The demand for savings insurance is expected to decrease, with rising interest rates on bank deposit products making savings insurance look relatively less attractive. Variable life savings insurance is also faced with some headwinds due to a lackluster stock market, but a growing interest in investment products may push up the demand for variable savings insurance.

On the other hand, sales of life annuity premiums will remain solid because increasing life expectancy is fueling the growth of the demand for annuity plans, and rising crediting rates may lead to a renewed interest in annuities with an increasing number of baby boomers hitting retirement age.



Non-Life Insurance

The non-life insurance market has been demonstrating greater resilience over the last few years compared to the life sector, and its premium volume is expected to grow by 4.4% to KRW 133.8 trillion in 2024. The growth will be supported by long-term personal accident and health insurance, general property and casualty (P&C) insurance, and retirement annuities.

Long-term insurance is projected to grow by 4.3% in 2024, driven by personal accident, health insurance and driver insurance. The motor insurance market is projected to slow down, growing by 1.8%, under the assumption that there is no premium rate adjustment. The rise of usage-based insurance and online distribution channels usually offering lower prices is also putting downward pressure on premium income growth per policy.

General P&C insurance will remain a strong driver of growth, although it still accounts for a small portion of the entire non-life market. Its premiums are expected to grow by 5.2% in 2024, and firm growth momentum will come from the casualty lines of business backed by liability insurance amid an increased awareness of the importance of liability protection for companies and the expansion of compulsory insurance.