Insurers urged to target foreigner residents

By Jhoo Dong-chan

Insurers should target foreign residents here to boost their performance amid the increasingly saturated insurance market,a study said Sunday.

Due to the country's low birthrate, an influx of foreigners is now leading Korea's population growth. The study proposed major insurers such as Samsung Life and Hyundai Marine & Fire Insurance should introduce more diversified insurance products for foreign residents here.

“Despite years of the government's efforts to promote childbirth, the country's birthrate has been consistently decreasing,” said a recent study released by the Korea Insurance Research Institute (KIRI).

“The number of deaths is expected to outnumber the number of births this year.”

According to the Ministry of Health and Welfare, the nation's average birthrate dipped below one per woman for the first time last year. The number of annual births has been below the 300,000 level since 2016.

In the meantime, the number of foreigners who stay more than 90 days in Korea surpassed 400,000 in 2017. The Ministry of the Interior and Safety said 1.68 million foreigners were registered as of the end of last year.

“The importance of their presence in our community has yet to be fully addressed in the social arena. Also, the government hasn't really come up with effective policies to support them,” KIRI researcher Lee Tae-yeol said.

“They are potential customers for domestic insurers. Foreign residents in Korea are different from Koreans in gender ratio, age group and occupational clusters. Domestic insurers need to introduce more diversified insurance products to meet their demands.”

The study suggested foreign residents in Korea are on average younger than Koreans while men outnumber women. They also tend to work in unskilled jobs so might be more at risk than local residents.

According to the Financial Supervisory Service, Samsung Life Insurance was the nation's only life insurer to post a year-on-year growth in earnings in 2018.

It recorded a 1.73 trillion won ($1.44 billion) net profit last year, up 37.5 percent from the previous year. The earnings surprise was, however, a one-time thing as it sold 751.5 billion won of Samsung Electronics shares last year.

Most insurers suffered more than a 20 percent decline year-on-year in earnings in 2018 due to the nation's saturated financial market as well as toughening financial regulations on their cash reserves.