From Interpretation to Dedicated Care... Life Insurance Companies Put Effort into Long-Term Foreign Residents

Domestic Long-Term Foreign Residents Near 2 Million
Life Insurance Companies' Strategies to Address Shrinking Native Market

As the number of long-term foreign residents in Korea increases, life insurance companies are fiercely competing to attract foreign customers. Due to the nature of life insurers, who tend to have many long-term contracts and thus must respond more sensitively to the shrinking domestic market, securing foreign customers has become an essential strategy for future growth.

According to the Ministry of Justice on the 3rd, as of the end of May this year, the number of long-term foreign residents in Korea was 1,953,619, approaching 4% of the total population of the Republic of Korea. Long-term foreign residents refer to foreign workers, international students, marriage immigrants, and others who stay in Korea for more than 90 days. This number represents a 10.6% increase compared to the same month last year (2,766,131). Except for 2020 and 2021 due to the impact of COVID-19, the number of long-term foreign residents has been steadily increasing year by year.

Accordingly, the number of life insurance subscriptions by foreigners is also increasing. According to the Korea Insurance Development Institute, the number of foreign life insurance policyholders rose from 261,000 in 2018 to 312,000 in 2022, an increase of 19.5% over four years. In a situation where the life insurance industry is deteriorating due to low birth rates and aging, attracting foreign customers is likely to become a new growth driver.

Life insurers are approaching this by providing language support to make it easier for foreigners to access products via mobile. For example, Hanwha Life offers a ‘Mobile Multilingual Guide’ service. This service translates key insurance-related tasks such as how to file a claim, how to change the policyholder, and how to take out a policy loan into foreign languages to assist foreign customers. It is integrated into the mobile sales support solution ‘Hanwha Life Visible GA World,’ allowing agents to conveniently deliver information to customers anytime and anywhere. Currently, only Chinese is supported, but there are plans to expand the service to other languages in the future.

Samsung Life launched a ‘Foreign Customer Care Service’ in March this year, enabling foreign customers to access necessary insurance information in their native languages. It supports foreign customers by providing content such as how to handle insurance procedures, insurance-related information and services, and events through images sent via a mobile text platform. Although various insurance information and guidance have traditionally been provided to foreign customers similarly to domestic customers, most content was written in Korean, causing inconvenience as foreign consultants had to verify the information. The target languages are Chinese and Russian, which have a high proportion of new subscribers, with plans to expand to English and other languages later.

Life insurers have also assigned foreign language counselors and exclusive insurance planners to enable customers to communicate in their native languages. Kyobo Life has been operating a foreign language consultation service for new contract monitoring since September 2019. Considering the increasing number of foreign policyholders, this service provides coverage details to foreign customers who have communication difficulties. Specialized counselors who can speak English and Chinese are assigned during new contract monitoring, and over 100 foreign insurance planners support the convenience of foreign customers in subscribing.

Expanding the foreign customer base beyond language and cultural barriers is expected to become a necessity rather than an option for life insurers. Professor Seo Ji-yong of the Department of Business Administration at Sangmyung University explained, "Life insurers tend to have more long-term insurance than non-life insurers, making it harder to attract customers, so they have a stronger will to expand the market for foreigners," adding, "Efforts to attract foreign customers in various ways will continue in the future."