Insurers expand product lineup amid rising foreign population

Foreign seasonal workers work at an orchard in Bonghwa, North Gyeongsang Province, in this undated photo. Courtesy of Bonghwa County

Insurance companies are accelerating the launch and development of products in response to the increasing number of foreign residents here, industry officials said Wednesday.

Earlier in the day, NH NongHyup Property and Casualty Insurance introduced a new comprehensive insurance plan designed to better support the growing number of foreign seasonal workers in rural areas.

Under the seasonal worker program, local agricultural cooperatives hire foreign nationals and dispatch them to farms facing labor shortages during peak farming seasons.

The new insurance product provides coverage for liabilities related to agricultural work, expenses for workers' early return due to accidents or illness, and compensation for business interruption in the event of a disaster. Agricultural cooperatives nationwide are eligible to enroll in the policy.

The number of foreign seasonal workers employed in Korea is projected to reach around 95,700 this year, marking a 41 percent increase from the 67,778 employed last year.

These workers have been gaining popularity among local farms, as their daily wages average around 100,000 won ($74), as much as 100,000 won less than those hired through private labor agencies.

However, due to the lack of tailored insurance products, local agricultural cooperatives, which are required to employ seasonal workers on a monthly wage system to meet minimum wage standards, have faced financial risks when operations are suspended for various reasons, including the declaration of special disaster zones.

In such cases, they have been unable to recover labor costs from the farms.

"With the introduction of the new insurance product, agricultural cooperatives are expected to experience reduced financial burdens and operate more smoothly," an NH NongHyup Property and Casualty Insurance official said.

International students showcase traditional dishes from their home countries at the International Food and Culture Festival at Pusan National University in Busan, May 9. Yonhap

In May, DB Insurance signed a strategic business partnership agreement with Hanpass, a comprehensive financial platform for foreign nationals, to better provide auto insurance services for foreign clients.

Hanpass is a fintech company that offers overseas remittance services targeting foreigners, international students and overseas Koreans.

Under the partnership, the two companies will collaborate on offering auto insurance services for foreign residents and developing related value-added services. DB Insurance expects this partnership to improve service accessibility and convenience, helping to grow the market and launch new offerings.

"We plan to keep delivering innovative, customer-focused solutions through various collaborations," a DB Insurance official said.

As of 2024, the number of foreign residents in Korea stood at 2.65 million, with insurance contracts among them steadily increasing.

Last year, foreign residents held around 1.14 million insurance policies, covering roughly 40 percent of their population.

In response to this trend, the Financial Supervisory Service (FSS), the country's financial watchdog, vowed to improve convenience for foreign insurance customers throughout the entire process.

Currently, annual insurance contract notices summarizing key policy information are sent by mail, KakaoTalk messages or text only in Korean to both domestic and foreign policyholders. The FSS said that starting in the fourth quarter, these notices will also be provided in English and Chinese.

Moreover, the website that helps users find their insurance policies will introduce English and Chinese language options.

"These changes will be implemented in response to the inconveniences faced by insurance policyholders. We will continue to gather feedback to improve financial consumers' accessibility," an FSS official said.