Preliminary data released by the Financial Supervisory Service reveals a significant surge in net income for insurance companies in South Korea during 2023, totaling KRW13.36 trillion ($9.68 billion). This marks a substantial increase of KRW4.18 trillion or 45.5% from the previous year.
Life insurance companies saw their net income rise by 37.6% year-on-year to KRW5.10 trillion in 2023. However, non-life insurers experienced even more substantial growth, with their net income expanding by 50.9% to KRW8.26 trillion. The boost in profits is attributed to the implementation of International Financial Reporting Standards (IFRS) 9 and IFRS 17, along with increased sales in protection-type insurance for life insurance and long-term insurance for non-life insurance.
Despite the overall increase in net income, total premium income for insurance companies decreased by KRW15.18 trillion or 6.0% in 2023, amounting to KRW237.61 trillion. Premium income for life insurance companies saw a notable decline of 15.3% year-on-year, reaching KRW112.41 trillion. While protection-type insurance witnessed a 3.2% growth, savings-type and retirement pension experienced decreases of 38.0% and 14.7%, respectively. Additionally, variable life insurance decreased by 4.0% between 2022 and 2023.
In contrast, premium income for non-life insurance companies increased by 4.2% from 2022, totaling KRW125.20 trillion in 2023. Long-term insurance saw a 3.5% year-on-year increase, while auto insurance and general insurance experienced growth rates of 1.4% and 8.5%, respectively. Retirement pension for non-life insurance also increased by 6.6% year-on-year.
By the end of 2023, the aggregate assets of insurance companies amounted to KRW1,224.6 trillion, representing a 6.5% decrease from the previous year. However, shareholders’ equity saw a substantial expansion of 87.4% to KRW166.6 trillion as of December 31, 2023.
Return on assets (ROA) increased by 0.40 percentage points to 1.09% in 2023 compared to the previous year. Conversely, return on equity (ROE) declined by 0.20 percentage points to 8.02% in 2023.
