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The nation's life insurers are suffering deteriorating profitability due to a worsening business environment.
Firms are now required to strengthen their cash reserves to cope with the IFRS 17, a new set of global accounting standards that are expected to be introduced in 2022.
Plus, less people are buying insurance products, and firms are now seeking "survival", instead of "growth."
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The figure reached 11.86 trillion won in the period in 2015 and 10.44 trillion won in 2016, but has halved in two years because of a decreasing number of life insurance policyholders.
The downtrend is also evident in the nation's big three life insurers' initial premium income over the past three years.
Samsung Life Insurance's income from its policyholders' first-month premiums was 2.19 trillion won in the January-to-October period in 2015, but nearly halved to 1.12 trillion won in the period the following year. The figure recovered a bit to 1.21 trillion won in 2017, but failed to continue the trend as it posted a 1.01 trillion won income in the sector last year.
Hanwha Life also suffered over a 70 percent decline in the sector over the past three years as it posted 1.47 trillion income in 2015, 1.37 trillion won in 2016, 567.5 billion won in 2017 and 407.8 billion won last year.
Kyobo Life posted a 993.3 billion won income in the sector in 2014, but the figure nosedived to the 300 billion won level last year.
"The nation's insurance market is already saturated while the population reached its peak. Consumers are not buying whole life insurance anymore," said an insurance general agency planner surnamed Song.
"Along with the introduction of the IFRS 17, the government also planned to implement a similar accounting standard in 2022. It's a tough time for insurers."
The IFRS 17 will require them to measure the liabilities of their insurance contracts by market value, not book value.
The KLIA study also shows more policyholders have terminated their contracts to receive cash refunds over the past three years.
According to the data, total cash refunds on policy termination were 23.67 trillion won between January and November last year, up 3.54 trillion won, or 17.6 percent, from the same period the previous year. It was the sharpest jump ever.
"It's a tough time for everyone. The first thing people do in the downturn is securing more cash by reducing their monthly payments. This is the reason why people terminate their insurance policies," Song said.
"Plus, insurers are also required to secure enough cash reserves to cope with the introduction of new accounting standards. I don't see any exit strategy here."
