As South Korea's population ages rapidly, the demand for health and retirement-focused insurance products is forecasted to drive steady growth in the nation’s insurance market.
According to a recent GlobalData report, South Korea's insurance sector is expected to expand from KRW 218.3 trillion (US$167.1 billion) in 2025 to KRW 249.7 trillion (US$191.2 billion) by 2029, reflecting a compound annual growth rate (CAGR) of 3.4%.
“The South Korean insurance industry contracted by 7.5% in 2023 due to slower economic growth, which impacted the demand for life insurance products. The growth is expected to bounce back in 2024, supported by a recovery in the economy and an increase in the aging population,” GlobalData insurance analyst Sneha Verma said.
Life insurance and pension products are set to dominate the market, with an expected 84% share of direct written premiums (DWP) in 2024. Despite a 9.3% decline in 2023, life insurance is projected to recover with a modest 0.5% growth in 2024, as more South Koreans seek health and annuity plans for financial security in retirement. Verma noted that heightened awareness of health risks, including the rise in life-threatening illnesses, is also increasing demand for health insurance options.
In addition to life insurance, general insurance is anticipated to grow by 4.9% in 2024.
On the other hand, motor insurance may face stagnant growth due to decreased vehicle sales amid high interest rates and weakened consumer confidence, according to the Korea Automobile Mobility Industry Association (KAMA).
South Korea's vulnerability to natural-catastrophic events is another factor expected to boost demand for policies covering fire and natural hazards. The National Fire Information System reported 30,316 fire incidents with financial losses totaling KRW 589.9 billion (US$456 million) through October 2024, underscoring the need for coverage in this area.
Looking ahead, Verma emphasized that the industry’s future focus will likely center on products addressing the aging population’s needs through the end of the decade.
“The South Korean insurance industry is set to experience steady growth over the next five years, with demographic changes driving the demand for life and health insurance. Products catering to the growing needs of a rapidly aging population are expected to be a focus area for insurers over the coming years,” Verma said.
