"Rapid Growth of General Damage Insurance Including Mobile Phone and Drone Insurance... Insurers Need to Strengthen Capabilities"

[Asia Economy Reporter Oh Hyung-gil] The general non-life insurance market is experiencing rapid growth. New coverage areas such as satellite insurance and mobile phone warranty insurance are emerging, while mandatory insurance is expanding due to the advent of kickboards and drones, as well as the popularization of companion animals.

On the 11th, Kim Se-jung, a research fellow at the Korea Insurance Research Institute, stated in the report "Recent Growth Factors and Implications of General Non-Life Insurance" that last year's growth rate of general non-life insurance was 8.3%, higher than the overall non-life insurance growth rate of 7.0%.

He explained that in the first quarter of this year, it also grew by 8.5% compared to the same period last year, surpassing the growth rates of long-term non-life insurance and automobile insurance gross premiums written.

Researcher Kim said, "General non-life insurance is mostly corporate insurance and is sensitive to economic cycles. The growth rate of general non-life insurance tends to lag nominal GDP growth by about one year and moves in a similar trend. However, recently, despite the slowdown in the real economy, the general non-life insurance market is growing rapidly. This is because the sensitivity of general non-life insurance to economic cycles is weakening due to industrial structural changes and the emergence of new coverage areas."

He added, "General non-life insurance will grow through the expansion of new risk coverage due to the rise of the 4th industrial revolution, new business models such as risk management services, and increased demand for coverage due to the expansion of collective risks. The weakening sensitivity of general non-life insurance to traditional manufacturing or construction cycles will continue."

Due to legal strengthening regarding liability, the coverage area of general non-life insurance is likely to expand beyond compensating for property losses caused by accidents to the field of risk management services that prevent and manage risks. The increase in collective risks such as natural disasters, epidemics, and cyber risks is expected to contribute to the long-term expansion of the general non-life insurance market by preparing coverage measures for these risks.

Researcher Kim said, "There is a possibility of entering a new growth phase along with fundamental environmental changes such as the increase in new coverage areas due to industrial structural changes represented by the 4th industrial revolution and the expansion of mandatory liability insurance due to the emergence of new risks. We must actively discover new areas and strengthen underwriting capabilities."

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