Samsung Life's Loans Surge by 4 Trillion Won in One Year... Kyobo Increases by 1 Trillion Won

Rising Bank Entry Barriers Cause Balloon Effect
20% Increase in Small and Medium-Sized Companies

The first Compliance Committee meeting after Lee Jae-yong, Vice Chairman of Samsung Electronics, was released took place privately on the 17th at the Samsung Life Insurance building in Seocho-gu, Seoul. The appearance of the Samsung Life Insurance building on that day. Photo by Moon Honam munonam@

[Asia Economy Reporter Oh Hyung-gil] Samsung Life Insurance's loan receivables have increased by more than 4 trillion won in one year. This is nearly double the increase compared to the same period last year. Among some small and medium-sized life insurance companies, there are also cases where loans have increased by more than 20%. As consumers are unable to obtain money from banks due to loan regulations, a balloon effect of turning to insurance companies is rapidly spreading.

According to the insurance industry on the 13th, Samsung Life Insurance's loan receivables in the third quarter amounted to 53.814 trillion won, up 2.9% from 52.317 trillion won in the previous quarter. Loans are rapidly expanding as the COVID-19 situation continues. In fact, loans slightly decreased from 47.691 trillion won in the first quarter of last year to 47.663 trillion won in the second quarter, but increased by 4.4% to 49.784 trillion won in the third quarter.

Then, it exceeded 50 trillion won (1.3%) in the fourth quarter of last year, and showed an upward trend again with 51.14 trillion won (1.3%) and 52.317 trillion won (2.3%) in the first and second quarters of this year, respectively.

As of the third quarter, the increase was only 951 billion won (2.0%) compared to the same period in 2019, but last year it increased by 2.89 trillion won (6.1%). This year, it has also surged sharply by 4.03 trillion won, an 8.0% increase.

In particular, corporate loans showed a remarkable increase. During this period, corporate loans amounted to 20.629 trillion won, up 13.0% compared to the same period last year. Household loans recorded 18.264 trillion won, an increase of 9.2%. Policy loans showed a slight increase (0.9%) to 14.852 trillion won.

Samsung Life Insurance lowered its own Debt Service Ratio (DSR) standard from 60% to 40%, raising the loan threshold, but has not stopped lending altogether.

Kyobo Life Insurance, one of the 'Big 3' life insurers, also recorded loan receivables of 21.498 trillion won as of the third quarter. This is an increase of 1.1325 trillion won (5.5%) compared to the same period last year. Hanwha Life Insurance, which proactively managed loans, reduced loans by nearly 2 trillion won compared to last year, totaling 21.803 trillion won.

Among small and medium-sized companies, there was a significant difference between those that strategically managed loans and those that actively sold loan products. NH Nonghyup Life Insurance's loan receivables decreased by 107.3 billion won from last year to 10.096 trillion won, and Shinhan Life Insurance barely increased by 0.1% to 8.613 trillion won compared to the same period last year.

On the other hand, Tongyang Life Insurance increased by 7.8% from last year to 7.5279 trillion won, while Heungkuk Life Insurance and DB Life Insurance rose by 11.0% and 23.0% to 6.803 trillion won and 4.2263 trillion won, respectively. KDB Life Insurance also increased by 9.3% from last year to 3.5067 trillion won.

The insurance industry expects the loan increase trend to continue until the end of the year. A life insurance company official said, "Since DSR regulations will be strengthened from next year, many loan customers are expected to flock until the end of the year," adding, "However, we plan to maintain loans at an appropriate level to manage household loans."

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