Insurance Company Corporate Loans Surpass Household Loans Last Year... "Doubled in 5 Years"

Impact of Increased Alternative Investments to Enhance Asset Management Returns

Asia Economy DB

[Asia Economy Reporter Ki Ha-young] Last year, as insurance companies increased alternative investments, the scale of corporate loans surpassed that of household loans.

According to the insurance industry on the 1st, as of the end of last year, the outstanding loan balance of insurance companies was recorded at 253 trillion won, an increase of 18.3 trillion won (7.8%) compared to the previous year. Corporate loans increased by 16.3 trillion won (14.4%) in one year to 129.7 trillion won. Household loans also increased by about 2 trillion won to 123.1 trillion won.

Corporate loans by insurance companies were only about 65 trillion won at the end of 2015, accounting for 65.7% of household loans, but have recently increased rapidly and surpassed household loans last year. In particular, loans to small and medium-sized enterprises increased by 108.1%, from 39.6 trillion won at the end of 2015 to 82.4 trillion won at the end of last year.

The increase in corporate loans is interpreted as a result of the insurance industry steadily expanding investments in real estate project financing (PF), infrastructure construction, and alternative energy. It is estimated that real estate PF loans alone increased by about 6 trillion won last year. In a low-interest, low-growth environment, insurance companies increased alternative investments to improve asset management returns.

Among household loans, the outstanding balances of insurance policy loans (contract loans) and unsecured loans decreased compared to a year ago despite the economic downturn caused by COVID-19. However, mortgage loans increased by more than 3 trillion won, reaching 47.2 trillion won.

This content was produced with the assistance of AI translation services.