The number of deaths in Korea is rising, but funeral halls and pre-need funeral service companies are decreasing, as the spread of no-mortuary and simplified funerals, along with the increase in single-person households and unclaimed deaths, has reduced demand for traditional funerals.
According to the Ministry of Health and Welfare on Tuesday, the number of funeral halls nationwide fell from 1,107 in 2021 to 1,075 in 2025.
In contrast, the number of deaths has been on the rise. The number of deaths in Korea last year reached 363,389, the highest annual figure on record except for 2022, when 372,939 deaths were recorded during the COVID-19 pandemic.
No-Mortuary Funerals and Single-Person Households Spread, Traditional Three-Day Funerals Decline
The shift in funeral culture is cited as the reason behind the decrease in funeral halls despite the rise in deaths. As more funerals are held without setting up a mortuary or are conducted simply with only family members, the burden on the existing revenue structure of funeral halls has grown, analysts say.
The main income for funeral halls comes from mortuary usage fees and food and beverage costs. However, no-mortuary funerals are often held without setting up a mortuary, focusing instead on the use of mortuary chambers and encoffining rooms. From the funeral hall's perspective, profitability is inevitably lower than that of the traditional three-day funeral.
The increase in single-person households and unclaimed deaths is also pointed to as a factor behind the decline in traditional funerals. According to Statistics Korea, the number of single-person households nationwide increased 21.1 percent over four years, from 6,643,354 in 2020 to 8,044,948 in 2024. The number of lonely deaths last year reached 3,924, the highest since the related survey began in 2017.
The number of pre-need funeral service companies is also rapidly decreasing. According to the Fair Trade Commission (FTC), the number of funeral service companies registered as prepaid installment transaction businesses fell from 163 in 2017 to 76 in the first quarter of this year. Over nine years, 87 companies have disappeared from the market through closures, registration cancellations, or mergers.
Capital Regulations and Price Competition Halve Pre-Need Funeral Companies in Nine Years
The decline in pre-need funeral companies became pronounced around 2019. The number of companies, which stood at 154 in March 2018, plunged to around 84 in 2019. This was due to the FTC's enforcement in January 2019 of an amended Installment Transactions Act that raised the capital requirement for funeral service companies from 300 million won to 1.5 billion won, leading to mass deregistration of companies that failed to meet the capital threshold.
The number of companies subsequently fell to 77 at the end of 2020, 75 in September 2021, and 72 at the end of 2022. In 2023, the number temporarily rose to 79 as installment-type travel product sellers were newly included, but it turned downward again to 76 in the first quarter of this year.
"On top of the 1.5 billion won capital requirement, regulations such as restrictions on credit extensions to controlling shareholders have been added, making it increasingly difficult just to hold on," the head of a small pre-need funeral company told News1. "There are even comments that figuring out how to wind down the business is a more realistic agenda than seeking new sales."
An official at a mid-sized pre-need funeral company also said, "In the past, upselling sales that added optional extras to a basic package were possible, but recently consumers seek a simple funeral at minimum cost from the start." The official added, "We have to compete on price with large companies, but we are being pushed out by scale, making it increasingly difficult to survive."
The contraction in the funeral industry could grow further amid changes in the demographic structure. According to Statistics Korea, the share of those aged 65 and over in the total population rose from 12.8 percent in 2015 to 20.3 percent last year. In contrast, the share of the population aged 15 to 64 fell from 73.4 percent to 69.5 percent over the same period.
