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Jun 2025

South Korea: Regulators to act on persistently low insurance policy retention rates

Source: Asia Insurance Review | Jun 2025

The Financial Supervisory Service (FSS) has expressed concern over South Korea’s persistently low long-term retention rates compared to international standards.
 
The insurance policy retention rate over a two-year period was around 20% lower than in overseas insurance markets, reported the Yonhap News Agency citing a report released by the FSS.
 
The report, titled “2024 Insurance Sales Channel Performance and Supervision Plan,” revealed that as of 2024, South Korea’s one-year policy retention rate stood at 87.5%, dropping to 69.2% after two years. The retention rate fell further to 54.2% after three years and to 46.3% by the five-year mark. 
 
The two-year policy retention rates in Singapore was 96.5%; Japan, 90.9%; Taiwan, 90.0%, and the US, 89.4%.
 
Korean financial authorities plan to release a final sales commission reform plan in the first half of this year to prevent churning and to promote policy retention. They could limit upfront commission payments and introduce performance-based compensation over several years. A 
 
 
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