Insurers target Korea's 1m foreign workers with improved access

Korea Herald

6 days ago

With coverage still at about 50%, foreign workers drive new insurance push
As South Korea's foreign workforce surpasses 1 million, insurers are lining up products tailored to this growing but historically underserved population.
With local insurance markets nearing saturation, foreign residents have become increasingly attractive as a new source of growth — launching tailored products, forming partnerships and expanding digital services.
Workers make up half of Korea's 2.04 million long-term foreign residents, and financial institutions are expanding insurance offerings and streamlining access through digital platforms.
A recent agreement between KB Kookmin Bank, Korea's largest commercial bank, and Samsung Fire & Marine Insurance, the nation's biggest non-life insurer, targets blue collar workers.
The partnership aims to simplify access to the four types of mandatory insurance required under the government's Employment Permit System for workers on E-9 (non-professional employment) and H-2 (work-and-visit) visas.
The four types are:
Departure Guarantee Insurance, which serves as a severance substitute for those who complete over one year of work and return home;
Wage payment guarantee insurance, covering unpaid wages in case of employer default;
Return-expense insurance, which helps cover flight costs, with premiums paid by the worker and reimbursed upon verified departure;
and Accident insurance, which compensates for non-work-related injuries, illness or death, supplementing Korea's industrial accident coverage.
Of the four, the first two must be arranged by the employer, while the latter two are the employee's responsibility. Return-expense insurance is the only one for which the worker pays the premium directly.
Although Departure Guarantee Insurance is similar to statutory severance pay, it is only payable when workers leave Korea, making it difficult to resolve disputes if the amount is less than what is owed. Recent moves such as this make it easier to monitor what has been paid in, allowing workers to check the amount in advance and take action if necessary.
Starting this month, foreign workers will be able to view their Samsung Fire-provided insurance policies via KB Kookmin Bank. By the third quarter, the service will expand to include online claim filing, enabling a fully digital policy management for foreigners.
This marks Samsung Fire's second partnership with a domestic bank for E-9 visa holders, following its collaboration with Hana Bank last September.
Meanwhile, Woori Bank has also expanded access, allowing foreign laborers to view work-related insurance policies via its 'Woori Won Global' app.
NongHyup targets seasonal workers
NH NongHyup Bank — one of Korea's five largest commercial banks, with a focus on rural and agricultural finance — has also entered the space with a financial package tailored to seasonal workers on E-8 visas.
Launched in June, the 'E-8 Package' is the first product under the bank's new foreign customer brand 'NH Global With.' It offers integrated services including insurance coverage in partnership with group affiliate NH Property & Casualty Insurance.
The package was developed based on feedback from seasonal workers themselves, aiming to close service gaps for those who still fall through the cracks of Korea's insurance system.
In a related move, NH Casualty also rolled out a specialized policy for public seasonal workers — those hired directly by municipal governments and dispatched to farms via NongHyup cooperatives.
Their number, which includes non-E-8 holders reached 95,700 this year, up 40 percent on-year. The policy covers farm-related liability, early repatriation due to illness or injury, and losses from government-declared disaster zones.
Foreign policyholders on the rise
This wave of activity comes as the number of insured foreign residents in Korea continues to grow. As of last year, 1.03 million of them were enrolled in a plan with a local private insurance firm. That's just over half, and up from 990,000 the year before. Despite this growth, the coverage rate among foreign residents still lags far behind that of Korean nationals, which nears 90 percent.
Reflecting this gap and its potential, insurance contracts held by foreign nationals in Korea grew at an average annual rate of 19 percent between 2019 and 2023, significantly outpacing the 13.2 percent growth recorded among Korean policyholders, according to the Korea Credit Information Services.
To support these developments, the Financial Supervisory Service established a dedicated task force in May and launched a comprehensive review of insurance subscription trends among foreign residents.
The regulatory agency requested insurers to submit data on the number of foreign policyholders and contracts from 2021 to 2024, along with measures taken to improve accessibility.
The FSS also plans to roll out standardized guides in English and Chinese for each stage of the insurance process — including enrollment, maintenance and claims — in the coming month. Starting in the fourth quarter, insurers will be required to provide these multilingual guides alongside existing materials at key touchpoints.