South Korea: Insurers see little headway overseas
Source: Asia Insurance Review | Jun 2019
The South Korean insurance industry is in a dilemma, finding itself in a mature market at home while making made little progress so far in overseas ventures.
Korean life insurers have a 0.5% share of the international market while general insurers have 1.8%, reported Business Korea citing a report on insurers’ overseas expansion by Jeon Yong-sik and Kim Yu-mi, analysts at the Korea Insurance Research Institute.
The research team said, “With stronger regulations on the risk-based capital ratio, such as the IFRS 17 and K-ICS (K-Insurance Capital Standard), and shrinking profits from the domestic market, South Korean insurance firms are losing their ability to expand business overseas. They are less incentivised to build local subsidiaries due to the time and costs required to set up insurance business infrastructure.”
Ten domestic insurers, including three life insurers and seven non-life insurers, had 40 offices, 32 local subsidiaries and 10 branches overseas in 2018. The total number of their overseas offices and branches decreased from 85 to 82 last year. However, the combined operating profit of the overseas offices, subsidiaries and branches reached $23.50m, from a loss a year earlier. Net profit stood at $23.70m in 2018, turning around from net losses in 2017. A