South Korea life insurers see first industry growth since 2016
Direct written premiums (DWP) among the top 10 life insurers in South Korea grew by 4.1-per-cent
After seeing a decline in compound annual growth rate (CAGR) of 3.3 per cent during 2015-19, the DWP for the top 10 insurers in the South Korean life insurance industry saw a growth of 4.1 per cent in 2020.
Term life and endowment grew by 4.2 and 9.8 per cent respectively compared to 2019. Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, also attributed ‘a drop-in market interest rate and aggressive marketing of savings-type products by insurers’ in reviving the demand for life insurance products.
Led by savings-type insurance products
Implementation of IFRS17 regulation, which mandates insurers set aside additional capital to sell savings-types products, was also postponed to 2023. Beforehand, South Korean insurers were compelled to limit sales of these products prior to 2020, however with the postponement they were able to prioritise the sale of endowment products to meet increasing demand for savings products.
Sahoo continued: “Savings-types insurance products are expected to remain competitive against bank deposits and savings products due to declining interest rates. Revival in the country’s economy, declining unemployment rate as well as increased pace of vaccination will support the growth in South Korean life insurance industry over the next couple of years.”
South Korea recently cracked down on unregistered medical institutions trying to lure international patients, making it illegal for them to offer medical advice and referral services.