Foreign non-life insurers are reportedly eyeing an entry into the Korean market, one that is dominated largely by local insurers and experiencing a sector boom thanks to the new accounting standard.
According to industry sources, Starr International Insurance Singapore is expected to target the travel insurance and accident insurance markets in 2024 if the firm manages a Korean branch license later this year. AIG and Ace Insurance are already targeting these markets.
According to a report from Business Korea, the local insurance market ranks seventh or eighth across the world. That said, foreign insurers account for less than 2.5% of the non-life market with a net profit of US$150 million. Individual consumer insurance products are dominating this market, with local non-life insurers proving to be the leaders across the sector.
The foreign entry also comes as Korean non-life insurers are posting immense upticks thanks to IFRS17, the new financial standard officially introduced this year. In particular, the non-life sector has four giants in the space: Samsung Fire & Marine, Hyundai Marine, DB Insurance, and KB Insurance. Despite the dominance and the harder barrier of entry, the report notes that foreign insurers have still been showing interest in the market in the last two to three years.
It remains to be seen if these foreign ventures post successful results, as five foreign insurers have already left Korea in the past decade. There are some successes, though; last year, FM Global received its permit from the Financial Services Commission and began operations in the country this year.
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