SEOUL, June 10 (Korea Bizwire) — Amid a shrinking economy due to the coronavirus, this year’s insurance premium income is expected to outstrip last year’s record.
The Korea Insurance Research Institute (KIRI) reported Tuesday that income arising from insurance premiums, excluding retirement pensions, will reach 179 trillion won (US$150 billion) this year, up by 1.5 percent on year.
The new report raises the institute’s earlier estimate of 173 trillion won issued last October. Last year, insurance premium income suffered a loss of 1.2 percent.
The current prospect of insurance premium income to outstrip the pre-pandemic era is mainly led by an increase to car insurance premiums last February.
Higher premiums have raised the estimate for income from car insurance premiums from 17.3 trillion won to 19.1 trillion won, an increase of close to 2 trillion won. Last year’s car insurance premium income was 17.6 trillion won.
Income from general insurance premiums, including car insurance premiums, is expected to reach 88.2 trillion won, which is almost as large as income from life insurance premiums.
Forecasts for life insurance premium income, on the other hand, suggested expected income of 91 trillion won, down 1.8 percent from last year.
The forecast for a significant drop, however, has improved since October when the institute noted an expected decrease of 3.1 percent.
The institute offers an improved forecast for insurance premium income even after the coronavirus outbreak, largely due to higher car insurance premiums as well as strong performance during the latter half of last year.
“Performance in the insurance sector during the second half of last year turned out to be better than we expected, which enabled us to provide a forecast that’s much brighter than eight months ago,” said KIRI researcher Cho Yeong-hyeon.
Cho explained that insurance premium income for Q1 this year outstripped prior expectations, possibly due to a temporary surge in demand as companies prepared to raise life insurance premiums, or due to an increasing number of contracts accelerated by competition.
Ashley Song (email@example.com)