The General Insurance Association of Korea (GIAK) and the Indonesian General Insurance Association (AAUI) have entered into a new memorandum of understanding (MOU) to advance collaboration and foster stronger industry ties.
This agreement builds on a prior MOU established in 2012, which primarily focused on promoting mutual cooperation through business partnerships and the exchange of information.
According to The Korea Times, the latest deal – signed in Seoul on Monday – aims to deepen engagement by supporting joint initiatives and aiding member companies in expanding into international markets.
Under the updated framework, the associations will prioritise expanding exchanges between member organisations, enhancing research collaboration, and sharing knowledge on critical industry areas such as risk management. Specific emphasis will be placed on climate risk management, an area of particular interest to Indonesian insurers.
The associations plan to facilitate private-sector engagement through training programs and information-sharing activities.
GIAK chairman and CEO Lee Byung-rhae said the MOU will strengthen collaboration for future development, contributing to the global competitiveness of the Korean insurance industry.
“I hope this will expand the opportunities for Korean general insurance companies in the Indonesian market, which has high growth potential and can contribute to the development of insurance industries in both countries,” he said, as reported by The Korea Times.
Currently, six Korean general insurers – including Meritz, Hanwha, Samsung, KB, DB, and Seoul Guarantee Insurance – have established operations in Indonesia. The market is viewed as promising, given its sizable population, steady economic expansion, and regulatory moves such as mandatory automobile insurance.
Indonesia’s insurance sector is expected to expand at a compound annual growth rate (CAGR) of 6.4%, reaching US$22 billion by 2027, according to industry forecasts.
Regulatory reforms introduced by the Financial Services Authority (OJK) are anticipated to drive consolidation and improve market stability.
A key component of the regulatory changes involves incremental increases in minimum equity requirements for insurers, with benchmarks set for 2026 and further hikes by 2028.
Fitch Ratings has indicated that smaller insurers may need to raise capital or pursue mergers to comply with these new standards. Companies that fail to meet the thresholds might consider joining Insurance Business Groups (KUPA) as an alternative strategy.
In South Korea, the insurance market is forecast to grow steadily over the next five years, driven by the needs of an aging population.
According to a report by GlobalData, the sector is expected to expand from US$167.1 billion in 2025 to US$191.2 billion by 2029, representing a CAGR of 3.4%. Products such as life and health insurance are expected to dominate, accounting for 84% of direct written premiums in 2024.
Although the market contracted by 7.5% in 2023 due to sluggish economic growth, recovery is projected for 2024 as demand for retirement-focused financial products rises. Heightened awareness of health risks, including chronic illnesses, is also expected to drive interest in health insurance options.
General insurance products, including those covering natural disasters, are expected to see increased demand. Reports indicate that South Korea experienced over 30,000 fire incidents in 2024, with damages exceeding US$456 million. Insurers are likely to expand coverage in response to the country’s exposure to catastrophic risks.
