Seokho Woo (pictured), executive director at RNA Analytics, said South Korea’s life insurers are facing a turning point as they respond to new solvency requirements and demographic pressures.
He noted that the industry is increasing its use of modelling tools to strengthen asset-liability management (ALM) and address risks under the Korean Insurance Capital Standard (K-ICS).
“Our work with clients tells us that through detailed scenario analysis, insurers can better understand how their portfolios will perform under a variety of market conditions – from interest rate changes to economic shocks,” Woo said.
According to RNA Analytics, requests for proposals from Korean carriers for risk and modelling platforms have risen, reflecting the focus on tightening solvency oversight.
Insurers are also implementing real-time monitoring, automated risk dashboards, and governance measures to manage model risk.
The industry recorded a 9.2% decline in direct written premiums (DWP) in 2023 but returned to growth in 2024.
Data from GlobalData shows the market is forecast to expand from KRW182.7 trillion (US$139.8 billion) in 2025 to KRW206.2 trillion (US$157.9 billion) by 2029, at a compound annual growth rate (CAGR) of 3.1%.
Pension products are projected to remain the largest line, with nearly 40% of total DWP in 2024. That segment is expected to grow at a CAGR of 4.7% between 2025 and 2029. Whole-life and endowment products are also forecast to expand, although at slower rates.
GlobalData insurance analyst Prasanth Katam said product demand is being supported by economic recovery and the country’s demographic trends.
Fitch Ratings, in its 2025 APAC Insurance Outlook, maintained a stable outlook for South Korea’s life and non-life sectors.
The agency said insurers will likely sustain profitability from protection-type long-term products but cautioned that the introduction of IFRS 17 and IFRS 9 could add volatility to reported investment results.
K-ICS, which requires solvency capital to be calculated using a Value-at-Risk method at a 99.5% confidence level, is encouraging insurers to adopt more proactive asset allocation to manage duration mismatches.
Fitch added that stable underwriting and continued releases of contractual service margins should help offset cost and reserving pressures.
Separately, the Financial Services Commission (FSC) is advancing a policy change that will allow individuals aged 55 and older to withdraw part of their death benefits while still alive.
The measure, due to take effect in October, is intended to help address poverty among seniors, which affects about 38% of South Koreans over 65.
Authorities estimate roughly 759,000 contracts could qualify, unlocking KRW35.4 trillion (US$25.3 billion) in benefits.
Policyholders will be able to access up to 90% of their coverage, either as a lump sum or in instalments.
Insurers are also moving into senior care services. KB Life operates retirement housing, Shinhan Life plans to open its first facility in 2026, and Samsung Life is preparing a subsidiary focused on elder care.
