Under the current financial law, a general non-life insurance firm that would offer car, fire and travel insurance is obliged to hold capital of 30 billion won (US$27.1 million). The rule stands the same for a smaller company that just wishes to sell travel insurance, and remains as a significant barrier to the ongoing development of the country’s insurance industry. The capital rules, combined with complex licensing rules, mean that no new general non-life insurance companies have entered the sector in South Korea in the last 10 years.
An FSC official noted, however, that travel insurance has more potential for an increase in business than other insurance lines, as the number of outbound travellers from South Korea continues to increase significantly. Official data shows that in 2014, over 14 million South Korean people went overseas, with the number of travel insurance policies sold reaching 1.29 million, a seven-per-cent increase over the previous three years. Premiums totalled 85.5 billion won, accounting for 0.16 per cent of overall general insurance premiums in the first nine months of 2014.