South Korea Motor Insurance Market Size (2024 - 2029)

The South Korean motor insurance market is experiencing a dynamic landscape influenced by the evolving mobility sector and regulatory frameworks. The market's scale is shaped by compulsory insurance requirements, which mandate coverage for vehicles with engine displacements above a certain threshold, thereby driving market participation. Despite challenges such as returning claims frequency and inflationary pressures on vehicle repairs, the market is poised for growth, supported by increased online sales and regulatory measures aimed at reducing traffic incidents. The market's expansion is further bolstered by the stability and growth in long-term insurance products, reflecting a robust demand within the non-life insurance sector.

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Market Size of South Korea Motor Insurance Industry

South Korea Motor Insurance Market Summary
Study Period 2024 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period
CAGR 4.50 %
Market Concentration Medium

Major Players

South Korea Motor Insurance Market Major Players

*Disclaimer: Major Players sorted in no particular order

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.

South Korea Motor Insurance Industry Segmentation

This report aims to provide a detailed analysis of the South Korean motor insurance market. It focuses on the market dynamics, emerging trends in the segments and regional markets, and insights on various product and application types. Also, it analyses the key players and the competitive landscape in the South Korean motor insurance market.

South Korea Motor Insurance Market is segmented by Insurance Product (Private Automobile Insurance, Business Automobile Insurance, Commercial Automobile Insurance, and Motorcycle Insurance), by Insurance Coverage (Compulsory Insurance and Voluntary Insurance), and by Distribution Channel (Agents, Banks, Brokers, and Others). The report offers market size and forecasts for the South Korea Motor Insurance Market in value (USD) for all the above segments.

By Insurance Product
Private Automobile Insurance
Busines Automobile Insurance
Commercial Automobile insurance
Motorcycle Insurance
By Insurance Coverage
Compulsory
Voluntary
By Distribution Channel
Agents
Brokers
Banks
Other Distribution Channels
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South Korea Motor Insurance Market Size Summary

The South Korean motor insurance market is experiencing a dynamic phase, influenced by evolving mobility trends and regulatory frameworks. The market, characterized by a consolidated structure with major players like Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance, is navigating challenges such as the return to normal claims frequency post-pandemic and inflation-driven increases in vehicle repair costs. However, the market is also witnessing opportunities through the growth of electric vehicles (EVs) and the expansion of online insurance sales. The increase in EV adoption, supported by government incentives and advancements in battery technology, presents new business prospects for insurers, who are developing specialized coverage options for EVs. The online insurance segment is rapidly growing, driven by the convenience of digital platforms and regulatory support for online transactions, making it easier for consumers to purchase auto insurance without intermediaries.

The market's growth trajectory is further supported by the compulsory nature of motor insurance in South Korea, which mandates coverage for vehicles with engine displacements over a certain size. This regulatory requirement, coupled with the increasing penetration of non-life insurance products, is expected to drive market expansion. The pandemic initially led to a decrease in claims, benefiting insurers, but as the market stabilizes, companies are focusing on maintaining profitability through innovative solutions and strategic partnerships. Initiatives like the memorandum of understanding between Carrot General Insurance and the Korea Transportation Safety Authority highlight the industry's commitment to integrating technology and enhancing road safety. Overall, the South Korean motor insurance market is poised for growth, leveraging technological advancements and regulatory support to adapt to the changing landscape of mobility and insurance.

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South Korea Motor Insurance Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Rise in Adoption of EV Vehicles

      2. 1.2.2 Growing Digital Platforms

    3. 1.3 Market Restraints

      1. 1.3.1 High Prices of EV motor insurance is restraining the market

      2. 1.3.2 Competition and Partnership with Foreign Financial Institutions

    4. 1.4 Porter's Five Forces Analysis

      1. 1.4.1 Bargaining Power of Buyers/Consumers

      2. 1.4.2 Bargaining Power of Suppliers

      3. 1.4.3 Threat of New Entrants

      4. 1.4.4 Threat of Substitute Products

      5. 1.4.5 Intensity of Competitive Rivalry

    5. 1.5 Insights on Merger and Acquisitions in the Insurance Industry

    6. 1.6 Impact of Government Regulations and Initiatives on the Insurance Industry

    7. 1.7 Impact of COVID-19 on Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Insurance Product

      1. 2.1.1 Private Automobile Insurance

      2. 2.1.2 Busines Automobile Insurance

      3. 2.1.3 Commercial Automobile insurance

      4. 2.1.4 Motorcycle Insurance

    2. 2.2 By Insurance Coverage

      1. 2.2.1 Compulsory

      2. 2.2.2 Voluntary

    3. 2.3 By Distribution Channel

      1. 2.3.1 Agents

      2. 2.3.2 Brokers

      3. 2.3.3 Banks

      4. 2.3.4 Other Distribution Channels

South Korea Motor Insurance Market Size FAQs

The South Korea Motor Insurance Market is projected to register a CAGR of greater than 4.5% during the forecast period (2024-2029)

Samsung Fire & Marine Insurance Co., Ltd., Hyundai Marine & Fire Insurance Co., Ltd., KB Insurance Co., Ltd., Korean Reinsurance Company and Meritz Fire & Marine Insurance Co., Ltd. are the major companies operating in the South Korea Motor Insurance Market.

South Korea Motor Insurance Market Report Snapshots

South Korea Motor Insurance Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)