South Korean insurers delivered a weaker underwriting performance in the first quarter of 2026, particularly in the life segment, where declining insurance income contrasted with stronger investment-driven earnings.
Preliminary data from the Financial Supervisory Service (FSS) showed insurance income for 22 life insurers fell by 7.5% year-on-year to KRW1.07 trillion (US$713.7m) due to “adverse experience losses”.
Life insurers recorded a solid premium growth with income rising 6.9% to KRW33.26 trillion in the first quarter. Growth was driven by 11.3% growth in protection-type insurance and a 5.3% rise in savings insurance premiums, while retirement pension premiums increased 5.7%. Variable life insurance premiums, however, declined 7.2% during the quarter.
Yet, overall profitability improved primarily due to investment performance rather than underwriting recovery. Net income for life insurers rose 40.6% to KRW2.38 trillion, driven by higher interest and dividend income as well as gains from the disposal of assets.
In contrast, 30 non-life insurers showed a modest improvement in underwriting performance, with insurance income increasing marginally by KRW5.0bn year-on-year to KRW1.96 trillion.
Premium income rose by 5.1% year-on-year to KRW33.23 trillion as general insurance recorded the strongest growth at 9.8%, followed by long-term insurance at 6.2%, while auto insurance premiums rose 3.0%. Retirement pension premiums declined 1.5% during the period.
However, non-life insurers reported a 12.3% decline in net profit to KRW2.11 trillion. Rising interest rates reduced bond portfolio valuations, contributing to a KRW229.4bn decline in investment income.
Across the sector, return on assets improved to 1.33%, up from 1.27% a year earlier, while return on equity declined to 10.03%, down 1.89 percentage points. Non-life insurers’ ROE fell to 12.31% from 16.49%, while life insurers’ returns remained broadly stable.
The FSS said uncertainty around interest rates, equity markets and foreign exchange movements could continue to affect insurer earnings and financial stability, and added it would monitor risks and guide companies to strengthen financial soundness as conditions evolve.
