Written by Yi Whan-woo
Life insurance companies are progressively introducing products designed to cover medical expenses associated with cancer, diseases, and other health risks in response to a shifting demographic landscape, as per industry officials on Wednesday.
Traditionally, non-life insurers have marketed these products, allowing policyholders to enjoy lifelong benefits for maintaining a healthier lifestyle. In contrast, life insurers typically offer products where the benefits are received by designated beneficiaries upon the policyholder’s demise, in return for premiums paid during their lifetime.
Given the current scenario, the new sales approach of life insurance companies is viewed as a strategic move to navigate challenging sales conditions stemming from declining birth rates and an aging population.
“The evolving landscape includes declining birth rates, an increase in single-person households, and a rapidly aging society, all pointing towards a long-term decrease in customer numbers and business potential,” stated a spokesperson from Kyobo Life Insurance.
The nation’s overall fertility rate decreased to 0.72 in 2023 from 0.78 the previous year, while the number of single-person households in Korea exceeded 10 million for the first time in March. By 2025, the country is projected to transition into a super-aged society, with individuals aged 65 and above expected to make up 20 percent of the total population.
In response to these trends, three major market players—Samsung Life Insurance, Hanwha Life Insurance, and Kyobo Life Insurance—have collectively launched seven products in the first quarter of this year aimed at covering the medical expenses of insured clients.
The quantity of such products has more than doubled compared to the previous year, surpassing the offerings introduced by the country’s five major non-life insurers during the same period. These non-life insurers include Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Meritz Fire & Marine Insurance.
Shin Seung-eun, an independent insurance sales agent, noted an increase in life insurers approaching her to promote their new products. She observed a sense of urgency in their approach to these products.
Currently, life insurers hold a 28.7 percent share of the non-life insurance market, with the remaining 71.3 percent dominated by non-life insurers. However, industry sources predict heightened competition between life insurers and non-life insurers in the upcoming years.
Samsung Life Insurance aims to raise the proportion of non-life insurance-related deals to 60 percent of all new customer contracts this year, up from an average of 40 percent. Meanwhile, Kyobo Life Insurance is actively promoting a campaign centered on long-term insurance plans customized for medical treatments.