Insurance Company Household Loans Reach 134.9 Trillion Won in Q1, Up 1.2 Trillion Won Year-on-Year
Household Loans from Insurance Companies Rise Amid Bank DSR Regulations
Q1 Household Loan Delinquency Rate at 0.79%, Up 0.19 Percentage Points Year-on-Year
In the first quarter of this year, household loans from insurance companies increased by 1.2 trillion won compared to the first quarter of last year. This is attributed to the balloon effect caused by the banks' total volume management of mortgage loans, as well as an increase in emergency loans taken out by ordinary people due to the economic recession.
According to the "Status of Insurance Company Loan Claims for the First Quarter of 2025" released by the Financial Supervisory Service on the 26th, the outstanding balance of insurance company loan claims stood at 267.8 trillion won, a decrease of 800 billion won compared to the same period last year and a decrease of 1.8 trillion won compared to the previous quarter. The delinquency rate for the first quarter was 0.66%, up 0.05 percentage points from the previous quarter.
An illustration depicting ChatGPT taking out a loan from an insurance company due to an economic recession. ChatGPT
While the total amount of loans from insurance companies decreased, household loans alone increased compared to the first quarter of last year. In the first quarter, household loans from insurance companies amounted to 134.9 trillion won, up by 1.2 trillion won from 133.7 trillion won in the first quarter of last year. Among household loans, mortgage loans totaled 52.2 trillion won in the first quarter, an increase of 1.1 trillion won from 51.2 trillion won in the same period last year. The government implemented the first phase of the Debt Service Ratio (DSR) regulation in February last year, applying a 0.38% stress rate only to bank mortgage loans for the first time, and in September, as the second phase, raised the stress rate for bank mortgage loans in the Seoul metropolitan area to 1.2%. As the limits on bank mortgage loans tightened, demand shifted to insurance company mortgage loans, which are part of the secondary financial sector. Starting in July this year, the third phase of regulation will be implemented, tightening all real estate mortgage loans in the Seoul, Gyeonggi, and Incheon metropolitan areas across all financial sectors, except for local real estate. In the first quarter, insurance policy loans and unsecured loans from insurance companies also increased by 600 billion won and 100 billion won, respectively, compared to the same period last year. In contrast, other loans decreased by 600 billion won.
The delinquency rate for household loans from insurance companies also rose. In the first quarter, the household loan delinquency rate was 0.79%, up 0.19 percentage points from 0.6% in the same period last year.
The non-performing loan ratio for insurance companies in the first quarter was 0.91%, up 0.15 percentage points from the same period last year and 0.27 percentage points from the previous quarter. The non-performing loan ratio for household loans was 0.57%, up 0.14 percentage points from the same period last year.
An official from the Financial Supervisory Service stated, "Delinquency and non-performing loan ratios have risen slightly as borrowers' debt repayment capacity has weakened due to the delayed economic recovery," and added, "We plan to continuously monitor loan soundness indicators such as delinquency rates at insurance companies and encourage them to enhance their loss-absorbing capacity by maintaining sufficient loan loss provisions."
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