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Korea Herald
28-07-2025
- Business
- Korea Herald
Insurers target Korea's 1m foreign workers with improved access
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.
Korea Herald
29-06-2025
- Business
- Korea Herald
KB Bank broadens remittance network for foreign customers
KB Kookmin Bank said Sunday that it has expanded its exclusive remittance service for foreign customers to 47 countries, up from just five. Newly supported destinations include the United States, Canada, United Kingdom, Japan and Thailand. The service -- KB Quick Send -- uses Visa's global network to offer a convenient and cost-effective way for foreign nationals in South Korea to send money abroad. With a flat fee of 5,000 won ($3.66) and no intermediary or cable charges, KB Quick Send provides an affordable alternative to traditional remittance services. Most transfers are completed within one business day. Accessible through the KB Star Banking mobile app, the platform offers a streamlined and user-friendly experience. To celebrate the expansion, KB Kookmin Bank is offering a 10,000 won financial coupon to foreign customers who use the service. Additionally, the first 100 customers to transfer 500,000 won or more will receive a 30,000 won GS25 mobile gift certificate. The promotion runs through the end of July, with full details available on the app. 'KB Quick Send is part of our effort to enhance financial accessibility for foreign customers,' a bank spokesperson said. 'We will continue to expand tailored services to meet the needs of a growing and diverse customer base.' With more than 2.65 million foreign residents now living in South Korea, local banks are increasingly rolling out multilingual services and exclusive financial products to serve this expanding market. As of April, the six major banks in Korea reported a combined total of 7.7 million foreign customer accounts.
Korea Herald
22-06-2025
- Business
- Korea Herald
Household loans by major banks rise at fastest pace in 10 months in June
Household loans extended by five major banks in South Korea rose at the fastest pace in 10 months, industry data showed Sunday, amid signs of overheating in the housing market and a recent rally in the local stock market. Outstanding household loans extended by the five major commercials banks here, including KB Kookmin Bank and Shinhan Bank, stood at 752.1 trillion won ($547.6 billion) as of Thursday, up 3.99 trillion won from the end of May, according to the data. This translates to a daily increase of 210.2 billion won over the 19-day period in June, the fastest pace since last August, when loans grew by a daily 310.5 billion won. If this trend continues through the end of the month, household loans are expected to increase by 6.3 trillion won in June, marking the largest monthly gain since August last year, when they jumped 9.63 trillion won. By category, outstanding home-backed loans reached 596.6 trillion won as of Thursday, up 2.99 trillion won from the end of May. Unsecured loans also climbed to 104.4 trillion won, increasing by 1.09 trillion won over the same period. Market watchers attributed the recent rise in household loans to strong demand for investment in both the real estate and financial markets. Recent data showed that Seoul's apartment market has been on an upward trajectory for 20 consecutive weeks since turning positive in early February, with the pace of gains accelerating in recent weeks. Apartment prices in the capital city climbed by an average 0.36 percent as of Monday, the biggest weekly increase since the second week of September 2018, when prices rose 0.45 percent. Meanwhile, the local stock market has also been rallying since the new Lee Jae Myung government took office earlier this month. The benchmark Korea Composite Stock Price Index (KOSPI) finished at 3,021.84 points Friday, surpassing the 3,000-point threshold for the first time since Dec. 28, 2021. (Yonhap)
Korea Herald
08-06-2025
- Business
- Korea Herald
Why won likely to stall above 1,300
Widening rate gap with US, trade tensions, weak fundamentals limit further gains The Korean won has been staging a sharp rally, reaching its strongest levels in seven months in June. However, further appreciation beyond the 1,300-per-dollar threshold appears limited as economic headwinds persist. Earlier this year, the won weakening past 1,400 per dollar was considered the 'new normal.' But the local currency has since gained ground, with its average exchange rate in May standing at 1,390.7 won per dollar, dipping below 1,400 for the first time since November. On Thursday, the won closed daytime trading at 1,358.4 per dollar — its strongest level since Oct. 14. The momentum continued in after-hours trading, with the currency quoted at 1,356.5 by the close. The local foreign exchange market was closed Friday in observance of a public holiday. The recent appreciation of the Korean won has been partly fueled by renewed interest from foreign investors in the stock market, who purchased local equities worth 2.2 trillion won ($1.6 billion) following President Lee Jae-myung's election victory on Tuesday. While some market observers expect the won to strengthen further against the greenback, forecasts generally cap gains in the low 1,300 range. For instance, KB Kookmin Bank projects the won could appreciate as much as 1,330 per dollar in June. In contrast, in September, the outlook was more optimistic, with market expectations of the won strengthening toward the 1,200 level — a return to 2022 conditions, when the annual average exchange rate stood at 1,292.2 won per dollar. Expectations for the won to break below 1,300 have since moderated, as structural challenges continue to weigh on the currency, despite the easing of depreciation pressure triggered by political uncertainty. 'While the won may appreciate further in the short term, gains will likely be capped,' said Wi Jae-hyun, an analyst at NH Futures. 'Supplementary budget measures, the resolution of political uncertainty, and a rate cut-driven recovery in domestic demand are expected to provide a floor for the Korean economy. However, uncertainties in exports, stemming from US President Donald Trump's tariff policies, continue to pose a significant headwind to a growth rebound.' Another key factor limiting further appreciation is the widening interest rate gap between Korea and the United States. Following the Bank of Korea's 0.25 percentage point rate cut in May, the key interest rate differential between Korea and the US widened from 1.75 to 2 percentage points. This gap is expected to grow further, as the US Federal Reserve has signaled a continued hawkish stance to curb inflation — in part due to Trump's tariff measures — while the BOK has leaned toward a more dovish approach to support domestic growth. The divergence in monetary policy increases capital outflow pressures from Korea, as investors typically shift toward higher-yielding assets. This outflow puts downward pressure on the won. Experts caution against expecting a major rally in the local currency. 'The current level of the won reflects the country's economic fundamentals. It would not be reasonable to expect a sharp appreciation when the local economy is forecast to remain weak,' an official from the Bank of Korea said. The official added that a weaker won can play a constructive role in an economic slowdown. 'In times of economic downturn, a softer currency can help boost exports and attract foreign investment in undervalued won-denominated assets. While actively depreciating the won to spur growth should be avoided, a weak currency does serve a purpose under such conditions.'
Korea Herald
08-06-2025
- Business
- Korea Herald
Why Korean won's rally hits wall at 1,300
Widening rate gap with US, trade tensions, weak fundamentals limit further gains The Korean won has been staging a sharp rally, reaching its strongest levels in seven months in June. However, further appreciation beyond the 1,300-per-dollar threshold appears limited as economic headwinds persist. Earlier this year, the won weakening past 1,400 per dollar was considered the 'new normal.' But the local currency has since gained ground, with its average exchange rate in May standing at 1,390.7 won per dollar, dipping below 1,400 for the first time since November. On Thursday, the won closed daytime trading at 1,358.4 per dollar — its strongest level since Oct. 14. The momentum continued in after-hours trading, with the currency quoted at 1,356.5 by the close. The local foreign exchange market was closed Friday in observance of a public holiday. The recent appreciation of the Korean won has been partly fueled by renewed interest from foreign investors in the stock market, who purchased local equities worth 2.2 trillion won ($1.6 billion) following President Lee Jae-myung's election victory on Tuesday. While some market observers expect the won to strengthen further against the greenback, forecasts generally cap gains in the low 1,300 range. For instance, KB Kookmin Bank projects the won could appreciate as much as 1,330 per dollar in June. In contrast, in September, the outlook was more optimistic, with market expectations of the won strengthening toward the 1,200 level — a return to 2022 conditions, when the annual average exchange rate stood at 1,292.2 won per dollar. Expectations for the won to break below 1,300 have since moderated, as structural challenges continue to weigh on the currency, despite the easing of depreciation pressure triggered by political uncertainty. 'While the won may appreciate further in the short term, gains will likely be capped,' said Wi Jae-hyun, an analyst at NH Futures. 'Supplementary budget measures, the resolution of political uncertainty, and a rate cut-driven recovery in domestic demand are expected to provide a floor for the Korean economy. However, uncertainties in exports, stemming from US President Donald Trump's tariff policies, continue to pose a significant headwind to a growth rebound.' Another key factor limiting further appreciation is the widening interest rate gap between Korea and the United States. Following the Bank of Korea's 0.25 percentage point rate cut in May, the key interest rate differential between Korea and the US widened from 1.75 to 2 percentage points. This gap is expected to grow further, as the US Federal Reserve has signaled a continued hawkish stance to curb inflation — in part due to Trump's tariff measures — while the BOK has leaned toward a more dovish approach to support domestic growth. The divergence in monetary policy increases capital outflow pressures from Korea, as investors typically shift toward higher-yielding assets. This outflow puts downward pressure on the won. Experts caution against expecting a major rally in the local currency. 'The current level of the won reflects the country's economic fundamentals. It would not be reasonable to expect a sharp appreciation when the local economy is forecast to remain weak,' an official from the Bank of Korea said. The official added that a weaker won can play a constructive role in an economic slowdown. 'In times of economic downturn, a softer currency can help boost exports and attract foreign investment in undervalued won-denominated assets. While actively depreciating the won to spur growth should be avoided, a weak currency does serve a purpose under such conditions.' silverstar@
