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South Korea Insurance Report Q2 2008Published by: Business Monitor International Published: May. 29, 2008 - 32 Pages Table of Contents
AbstractAs was the case in Q108, the main focus of this report is BMI’s proprietary Insurance Business Environment Rating (IBER). The rating brings together a number of pieces of relevant quantitative data, together with BMI’s Country Risk Rating (CRR). The IBER makes it easier for the insurance sector business environment in a particular country to be compared with the business environment for any other BMI-monitored industry in that country. The IBER also allows an objective and meaningful comparison of the insurance sector business environment between countries.Over the coming months, we will substantially change the format of the BMI insurance reports. In essence, we will focus to a much greater extent on the companies that are active in the non-life and life segments. South Korea’s IBER is 71.3. Relative to other countries in Asia Pacific, it is only a moderately attractive insurance market for foreign insurers. The landslide victory of Lee Myung-bak in the December 2007 presidential elections heralds tax cuts, labour market reform and the dismantlement of regulations within the financial sector over the next five years. Internal opposition and adverse conditions should, however, serve to dilute the more ambitious points in his election platform. The IBER for South Korea has been held back by the weakness of its regulatory framework and lack of openness to new entrants. It will remain lower than it otherwise ought to be - unless the promised reforms do materialise. Where South Korea stands out is in terms of the absolute size of both its life and non-life segments and the probable growth in both of these over the forecast period. Even after allowing for some troubling economic signs and a likely slowing of the economy, we anticipate that non-life premiums will grow by 4% annually in local currency terms and by 6% in US dollar terms. Life premiums are expected to increase by 5% annually in local currency terms and by 6% in US dollar terms. The key drivers of growth in the non-life segment in 2007-2012 are the anticipated rise in nominal GDP from around US$963.98bn to US$1, 203.35bn and an expected increase in non-lifepenetration from 3.77% of GDP to 4.00%. The key driver of growth in the life segment is the envisaged rise in life density from a miniscule US$1, 181.51 per capita in 2007 to US$1, 500 per capita in 2012.South Korea’s total population will also grow from 48.14mn to 51.02mn during the forecast period.The market, in both the life and non-life segments, is quite fragmented but dominated by local players.New foreign entrants face considerable challenges but a large market beckons to those able to overcomethe obstacles. Get Full Details About This Report >> |
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