"Insurance Shows Greater Employment Induction Effect Than Other Industries... Employment Policies Should Be Noted"

Employment Induction Coefficient by Industry (Job Creation Effect of the Insurance Industry by the Korea Insurance Research Institute)

[Asia Economy Reporter Oh Hyung-gil] The insurance industry has a greater employment inducement effect compared to manufacturing or other industries such as general finance, which are not insurance-related, leading to calls for focusing on the job creation function of the insurance sector when implementing employment policies.

On the 30th, Kang Seong-ho, a research fellow, and Jeong In-young, a researcher at the Korea Insurance Research Institute, revealed in the issue report "Job Creation Effect of the Insurance Industry" that the employment inducement effect of the insurance industry was 14.8 persons, higher than manufacturing at 4.9 persons, general finance at 5.6 persons, and financial auxiliary services at 7.3 persons.

This was interpreted as being due to the insurance industry's very high interconnection with other sectors, as well as the central role of sales organizations such as agents in the growth of the insurance industry.

The employment inducement effect refers to the total number of jobs generated when 1 billion KRW in sales (production) occurs in the relevant industry, and it is divided into direct and indirect effects.

The direct effect refers to the employment inducement effect generated within the industry itself when sales (production) increase in a specific industry, while the indirect effect refers to the employment inducement effect generated in other industries (related industries) when sales (production) increase in a specific industry.

Looking at the indirect employment inducement effect (9.9 persons) of the insurance industry by sector, it was found to induce employment of 5.85 persons in non-financial services, 2.94 persons in financial auxiliary services, and 0.64 persons in manufacturing.

However, the report noted that the impact of the COVID-19 pandemic was not reflected, and the insurance industry was not subdivided, so caution is needed in interpretation.

Research fellow Kang Seong-ho said, "While expanding public jobs is important during economic crises, after economic shocks, it is necessary to focus on revitalizing industries with high job creation effects from a long-term and market-friendly perspective. Insurtech and health management services significantly contribute to job creation in the IT industry and healthcare, so the activation of insurtech and expansion of health management services in the insurance industry could have a positive effect on job creation."

This content was produced with the assistance of AI translation services.