South Korea’s motor insurance industry is forecast to see steady expansion over the next half-decade, reaching an estimated KRW25 trillion (US$18.6 billion) in gross written premiums (GWP) by 2029, according to a market analysis by GlobalData.
This represents a compound annual growth rate (CAGR) of 4.5% from a projected KRW20.9 trillion (US$15.6 billion) in 2025.
Growth in South Korea’s motor insurance market is expected to be fuelled by a rebound in third-party liability coverage, increased new vehicle sales, and premium rate adjustments.
Comprehensive coverage continues to dominate the sector, accounting for 87% of the total motor insurance premiums, while third-party liability comprises the remaining 13%.
The motor insurance line remains the largest segment of the general insurance market, contributing over half of total non-life premiums in 2024.
Swarup Kumar Sahoo, a senior analyst at GlobalData, noted that insurers are responding to new challenges linked to electric vehicle (EV) adoption and claims inflation.
“The South Korean motor insurance market is expected to grow with an increase in premium price, high premiums for EVs, a rising share of EVs, and increasing traffic accidents. However, the growth will be slower due to the growing popularity of usage-based insurance and an expected increase in the unemployment rate due to the US tariff on automobile imports,” he said.
Loss ratios across the sector have been on the rise. The Financial Supervisory Service (FSS) reported an average motor insurance loss ratio of 92.4% for the top four non-life insurers as of November 2024, up from 81.5% a year earlier.
Simultaneously, traffic accident numbers rose from 1.78 million in the first half of 2023 to 1.84 million in the same period of 2024, putting further strain on insurers’ profitability.
Looking ahead, regulatory initiatives are expected to play a pivotal role in shaping the industry. South Korea’s commitment to achieving 100% electric new vehicle sales by 2040 is already influencing underwriting and product development strategies.
EV premiums, typically higher than those for traditional vehicles, continue to reflect their unique risk and repair cost dynamics.
At the same time, the growing prevalence of usage-based insurance (UBI) and the rise of digital insurance platforms have led to increased market competition and pricing pressure, creating a soft market environment for motor insurers.
Regionally, the Asia-Pacific (APAC) motor insurance market is anticipated to grow from US$229.2 billion in 2024 to around US$301.7 billion by 2029, marking a CAGR of 5.6%.
Key markets – including China, Japan, Australia, South Korea, and India – collectively accounted for more than 90% of the region’s motor premiums last year.
Across APAC, national policies on carbon reduction and EV incentives are influencing market trajectories. Indonesia is reviewing proposals to mandate third-party liability coverage, while Malaysia is pushing ahead with national EV adoption targets for 2030.
Insurers across the region are expected to continue investing in digital solutions, data analytics, and compliance infrastructure to adapt to evolving regulatory landscapes and shifting customer expectations.
