"Insurance Premium Differences by Age for Single-Person Households Growing, Need to Attract Potential Demand Under 30s"

Source: Korea Insurance Research Institute

[Asia Economy Reporter Changhwan Lee] The utilization of insurance among single-person households varies significantly by age. Those under their 30s had lower insurance premium expenditures, while from their 40s and 50s onward, insurance premium spending was actually higher than that of two-person households.

According to the Insurance Research Institute's report titled 'Age-specific Characteristics of Consumption Expenditure Composition in Single-person Households' on the 12th, the number of single-person households in South Korea was about 2.22 million in 2000, accounting for only 15.5% of all households. However, single-person households have continuously increased, surpassing 6 million significantly by 2020, reaching a share of 31.7%.

Single-person households generally have lower income levels compared to all households and show a higher dependence on transfer income. In terms of consumption expenditure, they tend to have a higher proportion of housing costs and a lower proportion of education expenses.

The composition of consumption expenditure in single-person households showed significant differences compared to households with two or more people: in their 30s, centered on food and housing costs; in their 40s and 50s, centered on education expenses. After the 60s, the composition was very similar between the two groups.

Among these, insurance premiums in single-person households were lower than those in households with two or more people in their 30s, relatively higher in their 40s and 50s, and then decreased again in their 60s.

Accordingly, the report emphasized that insurance companies need to pay attention to the fact that the proportion of insurance premiums in single-person households is higher than in two-person households during middle age (40s and 50s).

The report analyzed that the higher proportion of insurance premiums among middle-aged single-person households in both 2021 and 2011, compared to those under 30 and those in their 60s, likely indicates that single-person households in their 40s and 50s are already actively utilizing insurance to secure their own risks.

Senior Research Fellow Taeyeol Lee of the Insurance Research Institute explained, "The active use of insurance by single-person households in their 40s and 50s may imply that they have actively subscribed to pension products that guarantee survival risks."

Senior Research Fellow Lee also argued, "The low proportion of insurance premium expenditures among households under 30 may be because single-person households recognize the utility of insurance later than households with two or more people," adding, "Efforts are needed to draw out the potential demand for insurance among those under 30."

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