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South Korea Insurance Report Q1 2011
Business Monitor International, Dec 2010, Pages: 48
Business Monitor International's South Korea Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Korea's insurance industry.
Writing in December 2010, we have been able to include final data for fiscal 2009 (ie: the year to March 31 2010) and numbers published by the regulator in recent months. We estimate that total premiums in fiscal 2010 (ie: the year to March 31 2011) will amount to KRW152,533,594mn. This includes non-life premiums of KRW56,337,603mn and life premiums of KRW96,195,991mn. In fiscal 2015, the corresponding figures are forecast to be KRW174,176,708mn, KRW80,696,320mn and KRW93,480,388mn. In terms of the key drivers that underpin our forecasts, we expect non-life penetration to remain constant at 5.12% of GDP from 2010 to 2015. We forecast a modest increase in life density from US$1,686 per capita in 2010 to US$1,900 in 2015. BMI’s proprietary Insurance Business Environment Rating for South Korea is 69.7.
Although South Korea’s insurance sector is open to foreign multinationals, both the life and the non-life segment continue to be dominated by the extremely large domestic companies – which are typically associated with one of the massive South Korean corporate groups. In the non-life segment, for instance, Samsung Fire, Hyundai Fire & Marine, Dongbu Fire and LIG Non-Life account for about two-thirds of all premiums. In the life segment, Samsung Life, Korea Life, Kyobo Life and Shinhan Life speak for a combined market share that is only marginally smaller. However, ING (the fifth largest life insurer) and Allianz (the seventh largest) are both writing around US$1bn in premiums annually.
We make two other observations. The first is that the business of South Korea’s non-life insurers is inflated by long-term insurance products which, in other countries, might be considered to be a part of the offerings of the life segment. In the three months to June 30 2010, for instance, long-term products accounted for over half of total non-life premiums, which amounted to KRW11,748,934mn. The second is that the latest figures point to continuing strong growth in the non-life segment (which has consistently achieved double-digit growth since fiscal 2006 and a strong recovery in growth in the life segment, after two fairly dismal years in fiscal 2008 and 2009. For the time being, we are looking for growth rates to slow in the coming years.'
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