Cancellation of insurance policies by South Korean households is estimated to have reached a record high last year in the face of stagnant income and rising consumer prices.
According to the industry, the country's insurers returned KRW23 trillion (US$19.9 billion) during the first three quarters of last year to subscribers who cancelled policies. The cancellation for the whole of 2016 is expected to surpass the KRW28.3 trillion seen in 2015, then a record high, reported The Korea Times.
Households are also canceiling instalment savings. According to the country's five major banks - Shinhan, Kookmin, Woori, KEB Hana and Nonghyup - 45.3% of instalment savings were cancelled last year before they could mature. The surrender rate was higher than the 42.4% of the previous year. When a subscriber cancels instalment savings before maturity, he receives almost no interest.
Meanwhile, the Korea Chamber of Commerce and Industry said on 31 January that the Korean economy will be grappling with a host of uncertainties this year, with its major manufacturing industries having a harder time shipping goods abroad due to the increasing political uncertainties at home, China's slowing economy, as well as expected interest rate hikes and growing trade protectionism in the US.