South Korea Motor Insurance to Grow 2.4% in 2025 amid Rising Claims

• Motor insurance to grow 2.4% in South Korea in 2025
• Rising accidents, labor costs push premiums and loss ratios up
• Market to reach $18.6B by 2029 with 4.5% CAGR growth

According to GlobalData, South Korea's motor insurance sector is anticipated to experience a growth of 2.4% this year.This growth is bolstered by a rebound in motor third-party liability (MTPL) insurance following three years of decline, an increase in vehicle sales, and rising premium rates. MTPL constitutes 12.8% of the overall motor insurance gross written premiums (GWP), while comprehensive motor insurance represents the remaining 87.2%.

Moreover, the industry is expected to expand at a compound annual growth rate (CAGR) of 4.5%, increasing from $15.6 billion in 2025 to $18.6 billion in 2029 in terms of gross written premiums (GWP).

Motor insurance continues to be the largest segment within South Korea's general insurance industry, accounting for 58.3% of total general insurance GWP in 2024.Its growth had decelerated in recent years due to a decline in new vehicle sales; however, this trend is reversing as new car sales improve and premium rates increase.Premiums are projected to rise further in 2025, driven by higher loss ratios resulting from a greater frequency of traffic accidents and escalating labor costs. Data from the Financial Supervisory Service (FSS) indicate that the average motor insurance loss ratio of the top four non-life insurers increased to 92.4% in November 2024, up from 81.5% the previous year.

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Traffic accidents also rose from 1.78 million in the first half of 2023 to 1.84 million during the same period in 2024, and this trend is expected to continue, keeping loss ratios above 80% in 2025 and 2026.