BMI View: Developments through 2014 confirm our view that South Korea's massive insurance sector should continue to achieve steady growth in premiums through the forecast period. Demographic changes underpin rising demand for particular kinds of insurance. Many of the companies have pricing power (in addition to other obvious strengths). Crucially, distribution strategies and product portfolios have been changed in order to boost profitability. This is at a time that government policy is requiring other changes that are shareholder friendly.
2014 will probably be seen by insurers in both major segments of the South Korean market as a challenging period. Interest rates have fallen (from already low levels), undermining the profitability (to the insurers) of some of the products that they are offering. Regulatory decisions have increased costs and interrupted telemarketing sales. In the life segment, new business premiums have fallen sharply: this is because they were elevated by impending tax changes in H113. In the non-life segment, the general weakness of the economy has hit some sub-sectors.
Nevertheless, there have been a number of positive trends and developments. The non-life companies are continuing to benefit from growing demand for long-term products. The ageing of South Korea's population should continue to underpin an increase in the need for private health insurance. Above all, the companies themselves are taking measures to boost profitability (by changing distribution channels, by focusing on high margin protection products and by cutting costs). As we had envisaged, official data confirms that the non-life companies have been able to increase prices for motor vehicle-related insurance in H114.
For the foreseeable future, both segments will continue to be dominated by the offshoots of the chaebol corporate groups that dominate South Korea's economy, even if some of these insurers are listed companies. The government has directed an unwinding of...
The South Korea Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.
BMI's South Korea Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Korean insurance industry.
- Benchmark BMI's independent insurance industry forecasts for South Korea to test other views - a key input for successful budgeting and strategic business planning in South Korea's insurance market.
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BMI Industry View
Summary of BMI's key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.
Individual analysis of both Life and Non-Life insurance sector developments and prospects across developed states and emerging markets - supported by BMI's global industry growth forecasts. This is followed by an in-depth evaluation of region- and country-specific trends, focusing on BMI's country-by-country market growth data.
Business Environment Rankings
BMI's Insurance Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (Life and Non-Life) in the insurance market.
The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Rankings products.
BMI Industry Forecasts
Historic data series (2008-2012) and forecasts to end-2018 for key industry and economic indicators (see list below) supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
Premiums: Total (US$mn), growth (% y-o-y), penetration (% of GDP), density (US$ per capita) for Life and Non-Life sectors, and total premiums.
Life: Data on gross written premiums for all major non-life segments (e.g. motor, fire, work).
Non-life: Data on gross written premiums for all major life segments (e.g. life, retirement).
Economic: Nominal GDP (US$bn), real GDP growth (%), GDP per capita (US$), population (mn), unemployment (%), exchange rate (against US$).
Competitive Landscape & Rankings
Illustration of the insurance industry via rankings tables comparing gross written premiums by company (US$mn) and market share (%). This chapter also includes in-depth regional analysis of the market position, business strategies and investment potential of the leading insurance companies.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.