Insurance Companies' Loan Balance Reaches 270 Trillion Won in Q4 Last Year... Household Delinquency Rate on the Rise

Outstanding Loan Balance of Insurance Companies Increases by 2.7 Trillion KRW from Previous Quarter
Household Loan Delinquency Rate at 0.75%... Up 0.07 Percentage Points from Previous Quarter

In the fourth quarter of last year, the outstanding loan balance of insurance companies increased by 2.7 trillion KRW compared to the previous quarter. This is interpreted as a partial balloon effect on insurance companies as the banking sector continues to tighten loans.

According to the "2024 Q4 Insurance Company Loan Status" announced by the Financial Supervisory Service on the 30th, the outstanding loan balance of insurance companies was 269.6 trillion KRW, an increase of 2.7 trillion KRW from the previous quarter. Compared to the same period last year, it decreased by 3.6 trillion KRW.

The outstanding household loans amounted to 135.7 trillion KRW, increasing by 1.3 trillion KRW compared to the previous quarter. During this period, all components of household loans, including insurance policy loans (900 billion KRW), mortgage loans (300 billion KRW), and unsecured loans (100 billion KRW), increased. As commercial banks strengthened household loan management, loan demand appears to have shifted to the secondary financial sector, namely insurance companies.

Corporate loans reached 133.8 trillion KRW, up 1.4 trillion KRW from the previous quarter. During this period, loans to large corporations increased by 1.6 trillion KRW, while loans to small and medium-sized enterprises decreased by 200 billion KRW.

The loan delinquency rate was 0.61%, down 0.01 percentage points from the previous quarter. However, it rose by 0.19 percentage points compared to the same period last year. The delinquency rate for household loans was 0.75%, up 0.07 percentage points from the previous quarter, while the delinquency rate for corporate loans was 0.55%, down 0.04 percentage points.

The non-performing loan ratio was 0.64%, down 0.07 percentage points from the previous quarter. The non-performing loan ratio for household loans was 0.54%, and for corporate loans, it was 0.68%.

An official from the Financial Supervisory Service stated, "Overall loan asset quality is sound, but indicators of household loan asset quality, such as delinquency and non-performing loan ratios, have slightly increased compared to the previous quarter." He added, "We will continuously monitor the asset quality indicators of insurance company loans, enhance loss absorption capacity through sufficient loan loss provisions, and encourage early normalization of non-performing assets."