South Korea's population could shrink to just 15% of its current level within a century according to a new report by the Korean Peninsula Population Institute (KPPI).
The KPPI report has revealed that if the demographic decline continues the country’s population could plummet to just 7.53m by 2125, down from 51.68m today. This is less than the current population of the country’s capital Seoul (9.3m).
This of course has been revealed under the worst-case scenario. However, the most optimistic scenario would still see the population fall to 15.73m by 2125. This would be less than a third of its current size – while a median projection puts the figure at 11.15m.
The institute noted that South Korea’s fertility rate was only 0.75 in 2024 and the population replacement level is currently 2.1.
An internal survey by KPPI that involved analysis of around 60,000 posts on workplace community app Blind, found that people aged 20 to 40 prioritised money and housing over “love” when discussing marriage. Financial constraints were typically the dominant concern in conversations about childbirth.
At present, South Korea has 100 working-age people (15 to 64) supporting every 30 seniors (65 or older). Another estimate expects that by 2040, those in their 60s will make up a large portion of the population, with the size of those in their 20s – 40s being reduced to the half of those in their 60s.
The retirement of baby boomers inevitably leads to a decrease in economically active population and slower economic growth, putting a drag on life insurance market growth.
As a consequence of South Korea's rising life expectancy and falling birth rates, life insurance industry in the country has also been facing tough times. It has also been struggling with a protracted period of low interest rates and a decrease in the number of economically active people due to population ageing.
This has forced life insurers to shift their marketing focus on protection products, such as health insurance products designed to accommodate the needs of an ageing population, rather than on savings products.