For the first time, the number of foreign nationals in South Korea holding insurance policies with domestic life and non-life insurance companies has exceeded 1 million, marking a significant milestone in the country’s insurance sector.
According to the Korea Credit Information Services (KCIS), as of September, 1.03 million foreign residents were covered by domestic insurers. This represents a 56.3 percent increase from 2019, when the number stood at 660,000. The rising number of foreign residents is creating a new growth opportunity for insurers, especially as the domestic market faces challenges from South Korea’s low birthrate and aging population.
As of September, foreign nationals in South Korea numbered approximately 2.68 million, making up 5.25 percent of the country’s total population. The number of long-term foreign residents has also grown steadily, rising from 1.7 million in 2019 to 1.88 million in 2023. By September 2024, this figure surpassed 2 million, indicating a sharp growth trajectory.
This influx has spurred a rapid rise in insurance subscriptions among foreign nationals. From 2019 to 2023, the annual growth rate of insurance contracts for foreigners was 19 percent, outpacing the 13.2 percent growth rate for the general Korean population.
Foreign nationals have shown notable interest across various types of insurance, with the highest uptake in accident insurance (31 percent), followed by health insurance (18 percent) and automobile insurance (14 percent). Interestingly, the growth rate in insurance contracts was particularly pronounced among those aged 60 and above.
However, despite this growth, the insurance penetration rate for foreign nationals remains relatively low. Around 51.3 percent of foreign residents are insured, significantly lower than the 88.3 percent coverage rate for South Koreans. This disparity has created what industry experts refer to as a “blue ocean” — an untapped market with considerable potential for growth, as the domestic insurance market nears saturation.
A KCIS official highlighted that stricter eligibility requirements for foreign nationals under South Korea’s national health insurance system could provide further opportunities for private insurers to fill coverage gaps. “The tightening of national health insurance eligibility for foreigners presents a growing opportunity for private insurance companies to expand their offerings and address the needs of this demographic,” the official noted.
In response to this expanding market, South Korea’s major insurance companies are actively seeking to attract foreign nationals by launching specialized products and services. Samsung Life Insurance, for example, has established a dedicated sales team for foreign clients, while Samsung Fire & Marine Insurance operates a financial consultation center specifically for foreign residents.
Additionally, the number of foreign agents employed by South Korea’s top life insurance companies — including Samsung, Hanwha, Kyobo, Shinhan, and NH NongHyup — as well as non-life insurers like Samsung, DB, Meritz, Hyundai, KB, and Hanwha, has surged by 55.1 percent from 2020 to May 2024. This reflects the growing importance of foreign nationals as a key target demographic for the country’s insurance industry.
With the number of foreign nationals in South Korea continuing to rise and their insurance coverage still lagging behind that of the domestic population, the sector sees a significant opportunity for future growth, positioning foreign residents as a critical focus for insurers in the years ahead.
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