Ranking of Insurance Premiums Spent Per Capita Continues to Decline
[Asia Economy Reporter Changhwan Lee] It has been revealed that the size of South Korea's insurance market ranks seventh in the world. Concerns are also emerging that development is stagnating as the growth rate of the Korean insurance market is slowing down and the insurance density, which indicates the level of development of the insurance industry, is also declining in rank.
According to the Life Insurance Association and Swiss Re on the 17th, South Korea's gross written premiums last year amounted to $193 billion (approximately 270 trillion won), a decrease of about 1% compared to the previous year. Gross written premiums refer to the total premiums paid by policyholders and correspond to the sales revenue of general companies.
In the global insurance market, South Korea's gross written premiums ranked 7th, the same as the previous year. The United States ranked first with $2.7187 trillion, followed by China with $696.1 billion in second place, Japan with $403.6 billion in third, the United Kingdom with $399.1 billion in fourth, France with $296.4 billion, and Germany with $275.8 billion. South Korea's global market share in the insurance industry last year fell by 0.2 percentage points (P) from the previous year to 2.8%.
Breaking it down into life insurance and non-life insurance, both sectors ranked 8th worldwide. South Korean life insurers' gross written premiums last year were $101.9 billion (142 trillion won), a decrease of $1.188 billion (1.15%) compared to the previous year, and their global market share dropped by 0.39%P to 3.40%.
During the same period, non-life insurers' gross written premiums were $91.1 billion (127 trillion won), an increase of $4.11 billion (4.72%) compared to the previous year, while their global market share declined by 0.11%P to 2.40%.
South Korea's overall insurance density was $3,735 last year, ranking 18th, down two places from the previous year. Insurance density is calculated by dividing gross written premiums by the total population, representing the insurance premiums spent per capita. It is also an indicator of the development level of a country's insurance industry.
South Korea's insurance density ranking has been continuously declining from 14th in 2019 to 16th in 2020 and 18th in 2021. This is interpreted as the insurance industry's development in South Korea lagging behind compared to other countries.
The proportion of the insurance industry in the domestic economy is also decreasing. Last year, South Korea's overall insurance penetration rate was 10.9%, down 0.7%P from the previous year. Its ranking also dropped from 6th to 8th.
Insurance penetration rate is the ratio of gross written premiums to nominal GDP (Gross Domestic Product) and serves as an indicator of the size of a country's insurance industry within its national economy.
Swiss Re evaluated that although the sales of protection-type insurance continued in South Korea last year, the real gross written premiums decreased due to high inflation rates.
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