GlobalData forecasts that South Korea’s general insurance market will experience healthy growth, recording a compound annual growth rate (CAGR) of 6.8% over 2020–25f, making it an attractive market for foreign investment. Given such strong prospects, Lloyd’s of London general insurance broker Ramon International expanded to open an office in South Korea through its newest acquisition as part of plans to cement the firm in the Asian market. However, long-term success may prove challenging due to a declining population.
According to GlobalData’s Global Insurance Database, in terms of gross written premiums (GWP), South Korea’s general insurance market is set to grow from KRW112.3trn ($98.1bn) in 2021 to KRW143.9trn ($127.9bn) in 2025f, representing a CAGR of 6.8%. Furthermore, general insurance will account for 52.2% of GWP in 2025f, compared to 48.6% in 2021e. Motor insurance leads the way with a 17.5% share of general insurance GWP.
This opportunity has prompted Ramon International to enter the market by acquiring a majority stake in CKI Korea through its parent company, Kastor Holdings. Ramon International has now been rebranded as Ramon Korea Limited as it aims to grow its credibility in the Asian market.
Source: GlobalData’s Global Insurance Database
South Korea is one of the strongest economies in Asia, with GDP of over $1.8trn as per the IMF. That equates to roughly a 5% share of the entire Asian market. South Korea’s strong and growing economy is clearly promising to insurers and brokers, such as Ramon, in or entering into the market.
However, one of the biggest challenges they will face is the country’s declining population, which is set to fall by 13.7% by 2060 according to Statistics Korea. A declining population would naturally mean a smaller customer base. Nonetheless, the market provides insurers with the opportunity of a growing economy and a gateway into the wider region.