South Korea’s insurance industry is set to experience steady growth, projected to expand from $167.1 billion in 2025 to $191.2 billion by 2029, representing a compound annual growth rate (CAGR) of 3.4%, according to GlobalData. The market is expected to grow by 1.2% in 2024, fueled by changing demographics and increasing demand for health and retirement pension products.
Sneha Verma, an insurance analyst at GlobalData, highlighted that although the industry contracted by 7.5% in 2023 due to weak economic growth affecting life insurance demand, a recovery is anticipated in 2024. This rebound is expected to be driven by economic recovery and the growing ageing population in South Korea.
The life insurance and pension sector is expected to dominate the market, accounting for 84% of premiums in 2024. After a significant 9.3% decline in 2023, the life insurance segment is forecast to grow modestly by 0.5% in 2024. From 2025 to 2029, the sector is expected to see a CAGR of 3.1%. This growth is primarily driven by South Korea’s transition into a super-ageing society, with the share of people aged 65 and older set to increase from 18.4% in 2023 to 39.4% by 2050.
Increased awareness of health and financial planning is expected to further bolster demand for life insurance. Health insurance, in particular, is growing as cases of life-threatening diseases rise. For instance, the Central Dementia Centre of the Ministry of Health and Welfare reports that a new dementia patient is identified every 12 minutes, reflecting a concerning trend that is contributing to the growing demand for insurance products.
Meanwhile, the general insurance sector, which represents 16% of direct written premiums in 2024, is projected to grow by 4.9%. This increase is driven by compulsory lines of insurance and rising awareness about liability protection, spurring demand for liability insurance products. However, the motor insurance segment is expected to see limited growth in 2024, as a decline in vehicle sales hampers demand. Domestic car sales dropped by 10.1% in the first half of 2024, falling to 800,000 units from 890,000 during the same period in 2023, due to weak consumer sentiment and high interest rates.
South Korea’s vulnerability to natural disasters is expected to further support demand for fire and natural hazard insurance. The National Fire Information System reported 30,316 fire incidents by October 2024, with total losses amounting to $456 million, underscoring the risks associated with such hazards.
Overall, the general insurance market is forecast to grow at a CAGR of 5.1% between 2025 and 2029, driven by the demand for coverage in areas like liability and natural disaster insurance.
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