Report Overview

Growing vehicle ownership and mandatory insurance regulations are expected to boost the growth of South Korea Motor Insurance Market during the forecast period between 2024 and 2030.

South Korea Motor Insurance Market - Industry Trends & Forecast Report, 2030

South Korea Motor Insurance Market size was estimated to be worth USD 16.46 billion in 2023. During the forecast period between 2024 and 2030, South Korea Motor Insurance Market size is projected to grow at a CAGR of 4.52%, reaching a value of USD 22.43 billion by 2030. Major growth factors for South Korea Motor Insurance Market include a rising demand for electric vehicles and stringent government regulations that mandate compulsory insurance. Motor insurance is a profitable pursuit in South Korea because of low road accident fatalities in the country, which leads to fewer insurance claims.

Motor Insurance – Overview

Motor insurance, also referred to as vehicle insurance, car insurance, or auto insurance, is a form of insurance designed to provide financial safeguarding for cars, trucks, motorcycles, and other vehicles used on the road. Its primary purpose is to offer protection against physical damage or bodily injury resulting from accidents, as well as liability arising from incidents involving a vehicle. Vehicle insurance may further include coverage for theft of the vehicle and damage caused by non-collision events, such as vandalism, weather conditions, natural disasters, or collisions with stationary objects. The precise terms and conditions of vehicle insurance are subject to legal regulations specific to each region.

South Korea Motor Insurance Market

Growth Drivers

Mandatory Government Regulations

The South Korean Government makes it mandatory to purchase a liability insurance policy or enter a liability mutual aid agreement when a person buys a new vehicle in the country under the Compulsory Motor Vehicle Liability Security Act. Motor insurance provides many benefits to the driver or car owner, such as protection against legal notices. The policies protect drivers or passengers against heavy medical bills in case of accidents and cover the financial expenses of the damage as well. In addition, many motor insurance companies have a network of garages from where the insurer can seek services for repair in case of any damage to the vehicle.

Challenges

Limited Coverage in Certain Motor Insurance

The unpredictable nature of fatalities caused by road accidents makes it extremely difficult to cover all types of damages possible in these situations. Liability insurance, for instance, only covers damages of third parties and not the driver or their vehicle. Similar to this, collision insurance too only pays for the crash of the vehicle, does not cover medical bills, and increases the insurance premium. Furthermore, claiming insurance can also be a complicated process. These factors may act as major restraints for South Korea motor insurance market.

Impact of Escalating Geopolitical Tensions on South Korea Motor Insurance Market

Intensifying and further spreading of geopolitical tensions among countries across the major regions could adversely affect the growth of South Korea Motor Insurance Market. The demand for new vehicles or insurance declines as result of economic uncertainty, which affects consumer spending. Furthermore, the supply chain disruption may also lead to a shortage of vehicles or their components. It could drive vehicle prices, impacting the insured values and premiums. However, uncertainties in the market may influence consumer preferences, triggering the shift towards electric vehicles or fuel-efficient vehicles, which could alter the insurance market dynamics. In response to geopolitical events, the government may implement regulations that affect the insurance industry, such as mandates for certain types of coverage or restrictions on premiums.

South Korea Motor Insurance Market

Segmental Coverage

South Korea Motor Insurance Market – By Coverage

Based on coverage, South Korea Motor Insurance Market is segmented into liability coverage, collision coverage, comprehensive insurance, and others. The liability insurance segment holds the largest share of South Korea Motor Insurance Market. The liability insurance covers damage to the third party and their property. The liability insurance segment is essential to reducing the risks of losses in accidents and is a key component of the motor vehicle insurance market, representing the larger effort to ensure responsibility and compensation in the case of unanticipated events.

South Korea Motor Insurance Market – By Distribution Channel

Based on distribution channel, South Korea Motor Insurance Market is segmented into insurance agents/brokers, direct response, banks, and others. The insurance agents/brokers segment accounts for the highest market share in South Korea Motor Insurance Market by distribution channel. The high motor vehicle ownership rate among people aged 55 or above propels the demand for insurance agents/brokers to understand the technicalities of motor insurance. However, online channels are anticipated to witness the highest CAGR during the forecast period. Online motor insurance is quick, convenient, and economical. Customers can browse through products of many different insurance companies to suit their preferences and premiums and can check online reviews of existing customers, which drives its market growth.

South Korea Motor Insurance Market – By Application

On the basis of application, South Korea Motor Insurance Market is segmented into commercial vehicles and personal vehicles. The personal vehicles segment dominates South Korea Motor Insurance Market  owing to high personal motor vehicle ownership in the country. According to an estimate, there were about 26 million registered vehicles in South Korea in 2023, it translates that almost half of the population owns vehicles in the country. Government regulations that mandate insurance to register a vehicle upon purchase fuel the demand for motor insurance in South Korea.

Competitive Landscape

South Korea Motor Insurance market is intensely competitive, as a number of companies are competing to gain a significant market share. Key players in the market include Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, Kyobo Life Insurance, Hanwha General Insurance, Chubb Korea, LIG Insurance, AIG Korea, and MetLife Korea. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In August 2024 – Carrot General Insurance Corporation, a digital insurance company based in South Korea, announced to have secured exclusive rights for the use of behavioral-based insurance (BBI) from the General Insurance Association of Korea.

Scope of the Report

By Coverage

• Liability Coverage

• Collision Coverage

• Comprehensive Insurance

• Others

By Distribution Channel

• Insurance Agents/Brokers

• Direct Response

• Banks

• Others

By Vehicle Age

• New Vehicles

• Old Vehicles

By Application

• Commercial Vehicles

• Personal Vehicles