Foreign students studying in Korea participate in an educational event hosted by the Korea Saemaul Undong Center in Seongnam, Gyeonggi Province, Dec. 20. Courtesy of Korea Saemaul Undong Center

The number of foreign residents in Korea who have signed up for insurance through domestic life and non-life insurance companies has exceeded 1 million for the first time, according to the Korea Credit Information Services (KCIS).

With the continued rise in the number of foreign residents, coverage for non-Korean residents is emerging as a future growth engine for domestic insurers, whose growth has been hindered by the low birthrate and population decline in the country.

Data from the KCIS revealed that the number of foreign residents insured through domestic firms reached 1.03 million as of September.

This represents an increase of 56.3 percent compared to 2019 when the number stood at 660,000.

Foreign residents in Korea are eligible to enroll in both national health insurance and private insurance, just like Korean nationals.

As of September, there were approximately 2.68 million foreign residents in Korea, accounting for 5.25 percent of the total population. Among them, the number of long-term residents increased from 1.7 million in 2019 to 1.88 million in 2023. By September, this figure had surpassed 2 million, indicating a rapidly accelerating growth trend.

With this rapid growth, from 2019 to 2023, the annual growth rate of insurance contracts for foreign residents reached 19 percent, surpassing the growth rate for Koreans, which stood at 13.2 percent.

Foreign nationals exhibited a higher contract growth rate than Koreans across all age groups, with particularly notable growth among those aged 60 and above.

In terms of contract distribution, foreign nationals had the highest proportions in accident insurance at 31 percent, followed by health insurance at 18 percent and automobile insurance at 14 percent.

However, the insurance enrollment rate among foreign nationals stood at around 51.3 percent, significantly lower than the 88.3 percent for Koreans. As a result, the market for foreign nationals is seen as a blue ocean in the insurance industry, which has reached saturation with the majority of the domestic population already insured.

"As the eligibility criteria for foreigners under the national health insurance system become stricter, the private insurance sector has the potential to grow by addressing the coverage gaps," a KCIS official said.

Riding on the trend, insurance firms are actively competing to attract foreign customers by launching specialized products and services tailored to this demographic.

Samsung Life Insurance established a dedicated sales organization specifically for foreign clients, while Samsung Fire & Marine Insurance operates a financial consultation center exclusively for foreign nationals.

The number of foreign agents at five major life insurance companies — Samsung, Hanwha, Kyobo, Shinhan and NH NongHyup — and six non-life insurers — Samsung, DB, Meritz, Hyundai, KB and Hanwha — has increased by 55.1 percent from 2020 to May this year.