The Korea Insurance Research Institute (KIRI) has raised concerns over a sharp decline in the domestic insurance industry's profitability next year.
Speaking at a seminar titled “Insurance Industry Outlook and Challenges for 2026” on the 21st, KIRI warned that shifts in the business environment- marked by sluggish economic growth, persistently low interest rates, and growing financial market uncertainty are expected to adversely affect insurers, first impacting their financial soundness, then profitability, and eventually their growth potential, reported Industrynews KR.
The institute noted that after a significant deterioration in insurers’ financial health in 2024, profitability is projected to weaken further through 2025 and 2026.
KIRI cautioned that in the medium to long term, declining soundness and profitability could erode insurers’ ability to manage risks and respond to future challenges, potentially dampening overall industry growth.
KIRI has projected that the insurance industry’s overall premium growth rate will slow to 2.3% next year, marking a 5.1 percentage point drop from this year’s estimated 7.4% growth.
According to KIRI’s estimates, total insurance premiums in 2026 are expected to reach approximately KRW 265tn.
In the life insurance sector, premium income is anticipated to edge up by just 1.0%, supported by ongoing demand for protection-type products, while savings and variable insurance segments are likely to see continued declines.
Meanwhile, the non-life insurance sector is forecast to record around 3.5% growth, as the expansion of long-term non-life products slows and automobile insurance maintains its trend of weak growth.