KB Life Insurance operates five nursing homes in the Seoul metropolitan area, beginning with Wirye Village in 2019. The five facilities have a combined capacity of 673 residents, but the waiting list, including duplicate applications, has reached about 5,000 people — more than seven times capacity. Some facilities charge more than 3 million won a month for a single room, yet applicants keep lining up, drawn by convenient urban infrastructure and high satisfaction with the services.
Even so, nursing care businesses run by South Korean insurers remain in the red. Overlapping regulations prevent them from expanding capacity, and generating revenue is difficult. Industry officials say the rules binding insurers should be loosened, given that some 7 million baby boomers are entering old age.
According to financial industry sources on the 21st, KB Golden Life Care posted a net loss of 5.306 billion won in the first half of this year. Shinhan Life Care and Samsung Noble Life recorded net losses of 1.653 billion won and 1.495 billion won, respectively. KB Golden Life Care, established in 2016, has an average occupancy rate of 95% across its five facilities but has yet to reach break-even.
The picture is different abroad. Sompo Care, a unit of Japan's major insurance group Sompo, posted net profit of 6.6 billion yen (about 58.1 billion won) in fiscal 2025, up 53.5% from 4.3 billion yen a year earlier. Sompo is building nursing care into one of the group's core businesses, centered on Sompo Care, which runs nursing homes and home-based care services.
The industry points to regulations as the source of the gap. In South Korea, the burden begins at the stage of securing a facility. Operators of nursing homes are in principle required to own both the land and the building directly. Building a 100-bed facility is estimated to require at least 50 billion to 60 billion won. The industry is calling for operators meeting certain requirements to be allowed to run facilities through long-term leases. An official at an insurer said supply falls short of demand in places such as Seoul, but high land prices make it hard to expand facilities quickly, adding that long-term lease contracts of 10 years or more could secure housing stability for residents.
Even after committing large sums to secure facilities, expanding revenue sources is not easy. Under the current long-term care insurance system, charges outside coverage are limited to three categories: food ingredients, haircuts and beauty services, and premium room fees. In Japan and Germany, by contrast, operators can provide additional care or special services and charge separately for them. Demand to pay extra for better services is not small in South Korea either. In a survey by the National Health Insurance Service, 47.8% of family caregivers said they would be willing to pay additional costs. An official in the insurance industry said there is demand to pay more for high-quality services, but the channels to turn that into additional revenue are limited.
Labor costs are also heavy. Nursing homes in South Korea must employ one care worker for every 2.1 residents, but the supply of care workers is projected to peak at 806,000 in 2034 before declining. The Korea Development Institute (KDI) projected that maintaining the current level of workload would require additional personnel rising from 332,000 in 2033 to 990,000 in 2043. Japan sets a baseline of one nursing or care staff member per three residents but eases that to 0.9 per three residents under certain conditions when care technology is used. In China, some facilities equipped with smart care systems allow one care worker to handle up to eight residents. The industry is calling for staffing standards at facilities with smart care systems to be eased to 0.9 care workers per three residents in South Korea as well.
Kwon Jung-hyun, a research fellow at KDI, said using care robots and similar tools can reduce the physical burden on care workers and raise workforce productivity, stressing that the government needs to support the field adoption of care technologies and provide long-term care insurance reimbursement for technologies whose effectiveness has been verified.
