South Korea’s Insurance Market Reports Lower Net Results in 1Q2025 Despite Higher Premium Income
South Korea’s 22 life and 31 non-life insurance companies generated KRW4.097tn ($2.98bn) in preliminary net income for the first quarter of 2025, down by KRW769.9bn or 15.8% from the corresponding quarter a year earlier, according to the Financial Supervisory Service.
Life Insurance Companies’ Performance
Net income for life insurance companies shrank by KRW208.3bn or 10.9% to KRW1.696tn year on year. Increased expenses related to onerous contracts, along with the disposal of financial assets and reduced valuation gains on retained assets, led to a year-on-year decline of KRW123.0bn in insurance income and of KRW159.8bn in investment income for life insurers.
Non-Life Insurance Companies’ Performance
As for non-life insurance companies, net income decreased by KRW561.6bn or 19.0% to KRW2.401tn. Higher loss ratios made the non-life insurers lose KRW1.086tn in insurance income compared to the previous year. However, their investment income grew KRW418.2bn based on a decrease in bond valuation gains.
Premium Income
The insurance companies’ premium income totalled KRW62.731tn in the first quarter of 2025, up by KRW4.062tn or 6.9% from the corresponding quarter a year ago. Life insurance companies saw a significant increase in premium income, with a total of KRW31.112tn, up by KRW3.073tn or 10.96% from the previous year. Non-life insurance companies also reported an increase in premium income, totalling KRW31.619tn, up by KRW989.0bn or 3.23%.
The increase in premium income was driven by both life and non-life insurance sectors. Life insurance companies saw a rise in protection-type insurance and retirement pension products, while non-life insurers experienced growth in long-term insurance and general insurance.
The Financial Supervisory Service’s statement highlights the challenges faced by insurance companies in maintaining profitability despite growing premium income. The decline in net income is attributed to various factors, including increased expenses and reduced investment income.
The insurance industry in South Korea is expected to continue facing challenges in the coming quarters, with insurers needing to adapt to changing market conditions and regulatory requirements.
