South Korean insurers post 14.5% profit drop in 2025

Total premium income reached $179b across life and non-life segments.

South Korean insurance companies saw their preliminary net income fall 14.5% year-on-year to $8.19b (KRW12.2172t), data from the Financial Supervisory Service (FSS) showed.

Life insurance companies reported a net income of $3.33b (KRW4.9680t), down 11.8% year on year. 

This decline was primarily driven by a $0.24b (KRW352.7b) drop in insurance income due to experience losses and an increase in onerous contracts. 

Additionally, rising insurance finance expenses contributed to a $0.08b (KRW125.5b) dip in investment income for the life sector. 

The non-life insurance sector experienced a sharper earnings contraction, with net income falling 16.2% to $4.86b (KRW7.2492t). 

Whilst these firms saw a $0.78b (KRW1.1672t) boost in investment income from higher interest and dividends, these gains were offset by heavy losses in insurance operations. 

Despite the drop in bottom-line profits, total premium income for the industry rose 11.1% to $178.66b (KRW266.6595t). 

Life insurers saw a 12.4% increase in premiums, fueled largely by a 46.4% surge in retirement pension business and a 12.7% rise in protection-type insurance. However, savings insurance premiums in the life sector fell 4.6%. 

Non-life insurers recorded a 10% increase in premium income, supported by a 33.3% jump in retirement pensions and 7% growth in long-term insurance, though auto insurance premiums declined by 1.7%. 

Overall profitability metrics weakened during the period. The industry-wide return on assets (ROA) fell by 0.21 percentage points to 0.94%, whilst return on equity (ROE) dropped 1.35 percentage points to 7.86%.

($1.00 = KRW1,499.39)