Insights

Korea's insurance industry is moving beyond maturity into structural stagnation. The legacy domestic-growth model can no longer secure a sustainable future.

Samjong KPMG Economic Research Institute's Issue Monitor #170 maps out five future business directions for Korea's insurance industry under the structural pressures of low fertility, ageing, and slow growth, and deep-dives the survival strategies of five global leading insurers — Zurich, SOMPO, Allstate, Munich Re, and ZhongAn. Korea's total fertility rate collapsed from 4.53 in 1970 to 0.72 in 2023, and the population aged 65 and over is projected to more than double from 8.15 million in 2020 to 17.25 million by 2040. Japan, having entered an aged society in 1994, saw seven insurers fail or consolidate from the bubble's collapse and a negative spread; given that Korea is ageing faster than Japan did, the precedent is highly instructive.

Five future business directions: technology, wellness, multi-domain expansion, innovative industries, B2B. The report highlights five trends insurers should focus on: ① AI-driven digital intelligent innovation; ② next-generation wellness-insurance fusion models; ③ strategic convergence via multi-domain expansion; ④ stronger responsiveness to future innovative industries such as autonomous driving and AI; ⑤ technology-based B2B ecosystem expansion. These must act not as simple product/channel improvements but as catalysts that transform insurers' mindsets and entire operating models.

Cases from global leaders: AI and senior care at the core. CNP Assurances (France) raised its auto-underwriting rate by 5 percentage points with an AI-powered health-questionnaire analysis system and now approves over 80% of underwriting customers automatically. Aviva (UK) deployed AI across claims operations, shortening complex-claim cycle times by an average of 23 days, reducing complaints by 65%, and delivering roughly GBP 100 million in cost savings. SOMPO Holdings acquired two long-term care providers in 2015 and 2016 to launch SOMPO Care, building senior care as a new growth axis. Ping An, through its tech subsidiary OneConnect, is exporting insurance digital capabilities into external B2B and SaaS markets.

What this means for M&A. Strategic shifts at global leaders point to three M&A directions for Korea. First, as with SOMPO, strategic acquisitions of senior care, long-term care, and healthcare platform companies to capture aged-society demand are a strong growth path via bolt-on M&A. Second, acquiring insurtech startups and building technology organizations to internalize AI and data analytics capabilities will become a key variable defining the medium-term competitive gap among insurers. Third, like Ping An, externalizing technology capabilities through B2B/SaaS models — pushing into financial, healthcare, and mobility ecosystems via carve-outs or subsidiary IPOs — is likely to emerge as a strategy to consider.