NH Financial Group is steadily expanding its agricultural policy insurance offerings, serving as a pillar of support for Korean farming households. Industry observers describe the program as a form of inclusive finance that only NH can sustain, given that the group continues to operate the policies despite loss ratios exceeding 100%.
According to the financial industry on Tuesday, new subscribers to NH NongHyup Life Insurance's "Farmer Safety Insurance" reached 796,000 as of the end of May this year. Annual enrollment grew from 875,000 in 2020 to 1.019 million last year. The program is on track to maintain its growth trajectory this year, with subscriptions already approaching 800,000 in just the first five months.
The number of policies under the Crop Disaster Insurance program operated by NH NongHyup Property & Casualty Insurance stood at 312,600 as of the end of May this year. Annual enrollment expanded from 517,300 in 2020 to 702,200 last year.
Subscriptions to Livestock Disaster Insurance and Comprehensive Farm Machinery Insurance are also rising. Livestock Disaster Insurance policies reached 31,157 as of the end of April this year, up from 23,000 in 2020 to 42,500 last year. Comprehensive Farm Machinery Insurance saw 118,800 new policies during the same period, with total enrollment expanding from 118,800 in 2020 to 192,500 last year.
Revenue Stabilization Insurance, which was converted into a full program last year, is also gaining traction. The product covers not only declines in crop yields but also income losses caused by falling prices. Subscriptions stood at 8,476 as of the end of May this year.
As enrollment grows, insurance payouts are also climbing. Last year, payouts under NH Financial Group's five major policy insurance programs hit a record 1.7839 trillion won, driven by typhoons and heavy rainfall. Crop Disaster Insurance accounted for the largest share at 1.3357 trillion won, followed by Livestock Disaster Insurance at 219.1 billion won and Farmer Safety Insurance at 118.9 billion won.
Profitability pressure on the insurers is mounting. As of the end of last year, the loss ratio for Livestock Disaster Insurance stood at 121.1%, Crop Disaster Insurance at 119.9%, and Farmer Safety Insurance at 118.7%. A loss ratio above 100% means that claim payouts exceed premium income.
"Risk factors in agricultural fields are growing increasingly severe due to the aging rural population and climate change," an NH NongHyup official said. "We will continue to refine our coverage framework to support stable farming activities for agricultural workers."
