By Yi Whan-woo | The Korea Times | December 22, 2023
The steeply falling population in Korea is prompting domestic insurance firms to accelerate overseas business expansion in search of new subscribers.
Insurers have been looking abroad for years already but not purely for the purpose of survival. Instead, it had more to do with exploring new markets while the domestic front remained the most profitable.
“Under the circumstances, it has become apparent that going abroad is not an option but a prerequisite if the firms want to exist in the years to come,” an industry source said, Friday.
This new insurance trend comes on the back of Korea possessing the world’s lowest fertility rate at 0.78, which is highly likely to transform the country into a super-aged society, where the proportion of those aged 65 and older account for at least 20 percent of the total population, by 2025.
The looming demographic crisis is leading to fewer potential subscribers due to the saturated market. Correspondingly, data compiled from life insurers nationwide showed the number of their frontline sales units shrank to 1,927 in the third quarter of 2023 from 2,054 the previous year.
The 2023 figure marks a prolonged decline over the past decade, from 4,270 in 2013 to 3,890 in 2014, 2,885 in 2020 and 2,195 in 2021.
The number of employees at life insurance firms has also been falling over the same period, especially during the 2020-2023 period when the figure slid by 10.8 percent to 20,972.
In contrast, the total number of insurance firms’ branches operating outside Korea increased by four to 39 total branches between 2020 and 2022.
The looming demographic crisis is leading to fewer potential subscribers due to the saturated market. Correspondingly, data compiled from life insurers nationwide showed the number of their frontline sales units shrank to 1,927 in the third quarter of 2023 from 2,054 the previous year.
The 2023 figure marks a prolonged decline over the past decade, from 4,270 in 2013 to 3,890 in 2014, 2,885 in 2020 and 2,195 in 2021.
The number of employees at life insurance firms has also been falling over the same period, especially during the 2020-2023 period when the figure slid by 10.8 percent to 20,972.
In contrast, the total number of insurance firms’ branches operating outside Korea increased by four to 39 total branches between 2020 and 2022.
Of the 39, Korean Re has the largest number at eight, followed by Samsung Fire & Marine Insurance with seven and Hyundai Marine & Fire Insurance with five.
Hanwha Life and KB Insurance have four each, while DB Insurance has three, and Samsung Life Insurance, Kyobo Life Insurance and Seoul Guarantee Insurance have two, respectively. Shinhan Life Insurance and Meritz Fire & Marine Insurance have one each.
Overseas operations turn out to be increasingly lucrative, with sales from the 39 branches amounting to $123 million in 2022, up 35.5 percent from the previous year and nearly five times greater than in 2018.