The combined net profit of domestic insurance companies fell 14.5% to KRW12.2tn ($8.3bn) in 2025.
According to the Financial Supervisory Service (FSS), 2025 Insurance Company Business Performance report, the net profit of the country’s 22 life insurers and 30 non-life insurers was KRW12.2tn in 2025, that was a fall of KRW2.07tn or 14.5%, from 2024.
The FSS attributed the fall to the deterioration of insurance profit/loss, influenced by an increase in loss-making contracts, losses from actuarial assumption discrepancies, and rising loss ratios for long-term and auto insurance.
The net profit of the life insurance segment stood at KRW4.9tn, a decrease of KRW664.7bn or 11.8% from 2024. Investment income decreased by KRW125.5bn in 2025 due to rising insurance finance costs. The life insurance sector saw an increase in the sales of protection-type insurance (12.7%), variable insurance (2.8%), and retirement annuities (46.4%), whereas savings-type insurance saw a 4.6% decrease.
The net profits of the non-life insurance segment stood at KRW7.2tn, a decrease of KRW1.4tn or 16.2% from 2024. Investment income increased by KRW1.2tn, driven by increased interest and dividends, thereby absorbing some of the impact. In the non-life insurance sector, long-term insurance (7.0%), general insurance (5.0%), and retirement annuities (33.3%) showed an upward trend, whereas auto insurance decreased by 1.7%.
The Return on Assets for insurance companies in 2025 was 0.94%, a 0.21 percentage point decrease from 2024, whereas the Return on Equity fell by 1.35 percentage points to 7.86%. The total assets of insurance companies in 2025 stood at KRW1,344.2tn, an increase of KRW75.2tnn (5.9%) from 2024. The total liabilities increased by KRW48.9tn (4.3%) to KRW1,175.6tn. Equity rose by KRW26.5tn (18.5%) to KRW168.5tn, whereas the equity of life insurance companies increased by 20.1%, boosting the overall growth rate.
The FSS emphasised the need to manage potential risks amid the slowdown in insurance companies’ profitability and increasing domestic and external uncertainties. The FSS pointed out that actuarial assumptions should be set more conservatively and reasonably, and actuarial assumption discrepancies should be systematically managed to enhance the stability of insurance profit/loss.