Investors turn to South Korea’s life insurers for growth

Parental support and operational scale remain critical factors for these insurers.

International investors are increasingly turning their attention to South Korea’s life insurance sector, with key players such as Samsung Life, Hanwha Life, Kyobo Life, and Tong Yang Life drawing focus, according to CreditSights.

Parental support and operational scale remain critical factors. Samsung Life benefits from strong group backing, securing a leading 22% market share. 

Hanwha Life and Kyobo Life each leverage group or family affiliations to maintain 16% and 13% market shares, respectively.

Tong Yang Life, with a smaller 4% share, is expected to strengthen its market presence through deeper integration with Woori Financial Group, particularly via its bancassurance channels.

Solvency positions vary. Samsung Life holds a strong 177% solvency ratio, well above the regulatory 100% minimum. 

Hanwha Life is expected to improve to the mid-160% range following a recent bond issuance. 

Kyobo Life’s ratios range from 145% to over 180%, depending on transitional adjustments. 

Tong Yang Life currently reports the lowest ratio at 126%, but this should rise to around 154% post-issuance.

Profitability across the sector remains healthy. Tong Yang Life reports the highest return on equity (ROE) at around 12%, driven by a small equity base and solid value-of-new-business (VNB) margin from its protection-heavy product mix. 

Samsung Life’s sizable capital base limits its ROE to 4.7%. Hanwha Life and Kyobo Life show competitive ROEs in the 6% to 8% range, with Kyobo having an edge in both VNB margin and investment yields.