1. Korean Insurance Market
2018 EAIC - Seoul City Report

2. Table of Contents Korean Economy Korean Insurance MarketII
Korean Insurance Market
III
Business Environment for Insurers

3. Table of Contents Korean Economy Korean Insurance MarketII
Korean Insurance Market
III
Business Environment for Insurers

4. I. Korean Economy Key Economic Indicators
FY2017 : Economic growth rate has exceeded its initial outlook (2.7%)
FY2018 : Expected to maintain the similar level of growth rate as the year before
Classification
2016
2017
2018(E)
Economic growth rate (%)
2.9
3.1
3.0
Nominal GDP per capital (USD)
27,535
29,730 -
Consumer price inflation (%)
1.0
1.9
1.7
Current account surplus ($ BN)
99.2
78.5
Unemployment rate
3.7
3.8
Source : BOK (Mar. 2018), IMF (Apr. 2018)

5. Table of Contents Korean Economy Korean Insurance MarketII
Korean Insurance Market
III
Business Environment for Insurers

6. Korea in World Market (2016)
II. Korean Insurance Market
Korea in World Market (2016)
Korea was the 7th largest insurance market in the world (world share : 3.61%)
The market is in “mature stage,” with penetration rate of 12.1%
Premium Volume
Global Market Share
Global No. 7
Global No. 7
12.1%
3.61%
$ 171 BN
Penetration Rate
Global No. 5
● Non-life : $ 67 bn (No. 7)
● Life : $ 104 bn (No. 7)
● Non-life : 3.15%
● Life : 3.98%
Financial year : from 1 Apr to 31 Mar. 2017
Source : Sigma Report No. 3/2017 (Swiss Re)

7. II. Korean Insurance Market
Premium Income
55% increase in premium from 2010
Maintaining 4:6 (non-life : life) ratio over the years
Premium Growth Trends
Non-life vs Life
(Unit : USD bn)
(Unit : USD bn)
Source : GIAK, KLIA (Apr. 2018)
For all materials on this page and below,
- Financial year: from 1 Jan. to 31 Dec. unless stated otherwise
- Exchange rates for USD currency are fixed to Dec. 2017

8. Total Asset Growth Trends
II. Korean Insurance Market
Total Assets
115% growth in total assets since 2010
Notable growth in the proportion of Non-life assets
Total Asset Growth Trends
Non-life vs Life
(Unit : USD bn)
(Unit : USD bn)
Source : GIAK, KLIA (Apr. 2018)
For all materials on this page and below,
- Financial year: from 1 Jan. to 31 Dec. unless stated otherwise
- Exchange rates for USD currency are fixed to Dec. 2017

9. II. Korean Insurance Market
Capital Requirement
Insurers are steadily improving their financial strength, in preparation for higher capital requirements
Classification
RBC
Minimum
Requirement
Relative to
Dec. 2016
Dec. 2017
Non-life Insurers
227.9%
238.5%
100%
2.3 times
Life Insurers
240.6%
267.6%
2.6 times
Average
236.5%
257.8%
2.5 times
RBC : Risk-Based Capital (Statutory minimum requirement: 100%)
Source : FSS (Apr. 2018)

10. The Best Contents II. Korean Insurance Market Market Players Primary
Classification
Domestic
Foreign
Total
Non-life
Insurance
Primary 13 9 22
Reinsurance 1 10
Sub-total 14 18 32
Life Insurance 16 25 30 27 57
Primary
Non-life
Insurers
(22)
The Best Contents
Life
Insurers
(25)
Reinsurers
(10)
Intermediaries
(10)
As of Jan. 2018
Source : GIAK, KLIA (Apr. 2018)

11. Non-Life Insurance Market (2017)
II. Korean Insurance Market
Non-Life Insurance Market (2017)
Gross Premiums Written : USD 82.0 bn (3.3%↑)
- Motor (2.8%↑), Long-term (2.8%↑), Casualty (3.7%↑),
- Fire (-1.5%↓), Annuity (-4.5%↓)
Net Income: USD 3.6 bn (ROE : 11.4%)
[Non-life premium growth trends]
(Unit : USD bn)
Source : GIAK (Apr. 2018)

12. Non-life Insurance Market (2017)
II. Korean Insurance Market
Non-life Insurance Market (2017)
[Premium by Type]
[Market Share]
Source : GIAK (Apr. 2018)
Source : GIAK (Apr. 2018)

13. [Life premium growth trends]
II. Korean Insurance Market
Life Insurance Market (2017)
Premium Income: USD BN (-4.9%↓)
- Protection (3.1%↑)
- Savings (-12.2%↓), Annuity (-4.5%↓)
Net Income: USD 3.7 BN (ROE : 5.7%)
[Life premium growth trends]
(Unit : USD bn)
Source : FSS (Feb. 2018), KLIA (Apr. 2018)

14. Life Insurance Market (2017)
II. Korean Insurance Market
Life Insurance Market (2017)
[Premium by Type]
[Market Share]
Foreign
18.1%
Annuity
31.2%
Protection
35.6%
The Big
Three
45.4%
Small & Medium
36.4%
Savings
27.5%
Source : FSS (Feb. 2018)
Source : KLIA (Apr. 2018)

15. Table of Contents Korean Economy Korean Insurance Market FactsII
Korean Insurance Market Facts
III
Business Environment for Insurers

16. III. Business Environment
ECONOMY
● Low level of Economic Growth
- Requiring a shift from quantitative competition to new market exploration
● Uncertainties in Interest Rates
- Calls for increase in P&C and protection-type products sales for stable profitability
REGULATION
● Higher Capital Requirements
- Risk evaluation becoming more crucial for sustainable management
● Preparations for IFRS 17
- Market valuation makes selling long-term products more risky
● Consumer Trust
- Insurers putting efforts in reducing consumer complaints and disputes

17. III. Business Environment
DEMOGRAPHY
● Aging Population
- Role of Insurance’s role as a safety net will continue to increase
TECHNOLOGY
● Industry 4.0
- New technologies, new risks, new insurance products
● FinTech
- Regulators and Insurers co-working to provide adequate regulatory environment

18. Thank You Jae-Koo LEE Managing Director
General Insurance Association of Korea