The combined market share of South Korea's Big Three life insurers—Samsung Life, Hanwha Life, and Kyobo Life—has fallen below 50% based on premium income. While Samsung Life's market share increased compared to the same period last year, declines in Hanwha Life and Kyobo Life pulled the overall share down. Following the introduction of the new international accounting standard (IFRS 17), the focus of insurance companies has shifted from expanding size to long-term profitability and capital efficiency, leading to changes in the competitive landscape for premium income.
According to the insurance industry on August 26, the cumulative market share of Samsung Life, Hanwha Life, and Kyobo Life for the first five months of this year stands at 48.7%, a decrease of 2.9 percentage points compared to the same period last year. This figure also represents a drop of 0.4 percentage points from the cumulative data reported in February.
Premium income refers to the total amount of premiums received by insurers from policyholders, serving as a key indicator of an insurer's size. The combined annual market share of the Big Three had remained above 50% from 2022 until last year, but it has now fallen below that threshold, raising uncertainty about their ability to maintain a 50% annual share this year.
The performance of each company has varied. Samsung Life's market share for January to May is 20.8%, an increase of 0.5 percentage points from the same period last year. In contrast, Hanwha Life's share decreased by 1.5 percentage points to 14.5%, while Kyobo Life's share fell by 2.0 percentage points to 13.4%. The declines in Hanwha Life and Kyobo Life outweighed the gains made by Samsung Life, resulting in the overall market share of the Big Three dropping below 50%.
Industry experts believe that the changes in product sales strategies following the implementation of IFRS 17 have impacted the market share of premium income. In the past, selling high-premium savings or pension insurance and high-value whole life insurance could quickly increase premium income and market share. However, under the IFRS 17 framework, the importance of the contract service margin (CSM) and capital efficiency has grown.
As a result, life insurers are now placing greater emphasis on selling protection products, such as health insurance, rather than savings insurance. While savings insurance is advantageous for expanding size due to its larger premium payments, it has a stronger savings and accumulation nature, resulting in relatively lower profitability and capital efficiency. Protection insurance, on the other hand, has smaller premiums per policy, limiting the immediate impact on premium income growth but potentially securing higher CSM in the long run.
With competition intensifying in product offerings and sales channels, operational costs have also risen. Samsung Life's operational costs for the first half of this year reached 2.8612 trillion won, a 13.9% increase from the same period last year. Hanwha Life reported operational costs of 2.4386 trillion won, up 9.0%, while Kyobo Life's costs rose by 1.7% to 1.2738 trillion won. Samsung Life's sales promotion expenses increased by 27.1% during the same period.
An industry insider stated, "In the past, insurers could grow their size by selling large premium savings or high-value whole life insurance. However, since the introduction of IFRS 17, companies are now considering long-term profitability and capital efficiency when selling products rather than simply focusing on receiving high premiums."
* This article has been translated by AI.
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