"Declining Popularity of Asset-Building Insurance Products More Evident Among Young Generation"

Source: Korea Insurance Research Institute

[Asia Economy Reporter Changhwan Lee] Recently, the preference for insurance as a financial product for asset formation has been declining. This trend is more pronounced among the purchasing power class and younger generations.

According to the Insurance Research Institute's report titled "Analysis of Financial Product Preferences for Household Asset Formation" on the 17th, the proportion of households holding 'insurance assets' decreased by 9.4 percentage points from 2017 to 60%, based on last year's Household Financial Welfare Survey results.

In the Household Financial Welfare Survey, insurance assets refer to the accumulated amount of insurance premiums corresponding to the maturity refunds of savings-type and protection-type insurance.

The share of insurance assets among total 'accumulated and deposited savings' was 32% last year, down 8 percentage points from 2017.

Last year, the insurance asset holding rate by income quintile was highest at 79.6% in the 5th quintile (top 20% income) and lowest at 29.0% in the 1st quintile, showing a proportional relationship with income.

Source: Korea Insurance Research Institute

By age group, the insurance asset holding rate was highest in the 40s at 74.7%, followed by 72.1% in the 50s, 65% in the 30s, 44.6% for those aged 60 and above, and 36% for those under 30.

The decline in insurance asset holding rates over five years was largest among those under 30 at 20.1 percentage points, followed by 16.9 percentage points in the 30s. The 40s and 50s saw declines of 8.5 and 6.9 percentage points respectively, while those aged 60 and above experienced a 3.1 percentage point decrease.

Researcher Yuna Song of the Insurance Research Institute analyzed, "The household preference for insurance as a savings method is decreasing, and this phenomenon is more prominent among the younger generation and those with purchasing power."