Market Size of South Korea Motor Insurance Industry
| Study Period | 2024 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| CAGR | > 4.50 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
South Korea Motor Insurance Market Analysis
The South Korean Motor Insurance Market is valued at USD 17.39 billion and is expected to register a CAGR of more than 4.5% during the forecast period.
COVID-19 had a significant impact on almost all sectors of the economy, with the motor insurance market being one of the most affected. As far as loss ratios are concerned, the effects on motor insurance appear to be largely positive. Insurance companies that provide auto insurance coverage have benefitted from the pandemic, as fewer driving incidents have resulted in fewer insurance claims. The motor insurance loss ratio for January to September 2021 in Korea stood at 79.4%, a decrease of 5.6% from the same period in 2020 when the pandemic began in earnest in Korea. The incidence rate for motor insurance claims has significantly decreased since 2020.
Korea's motor insurance market is facing challenges and opportunities as the mobility sector continues to evolve. Premium growth was muted at 2% for the auto segment in 2022, while the combined ratio improved slightly by 0.5 percentage points to 96.9% for the segment. AM Best expects the auto segment to continue to experience pressure on the combined ratio as claims frequency returns to normal after the pandemic and inflation-driven increases in vehicle repair prices and the minimum wage. However, increased online sales and new regulations that limit traffic accidents are expected to help insurers sustain overall profitability. Long-term insurance (LTO), the biggest business segment in the Non-Lifes industry, remained stable at around 4% growth in 2022, driven by continued growth in the recurring premium portfolio and solid new business growth from health products.
As per laws of the South Korean auto insurance industry, it is necessary for every car that has an engine displacement size of at least 50 ccs. Mopeds and vehicles that are less than 50 ccs are not liable to be insured as per the auto insurance laws of South Korea. Thus, compulsory motor insurance plays an important role in promoting the motor insurance market in South Korea.
