Financial Services Commission "Activation of Pension Insurance and Senior-Specialized Insurance"

Insurance Industry to Implement One License per Company Reform

[Asia Economy Reporter Kwangho Lee] The Financial Services Commission (FSC) will activate insurance products specialized for the elderly to support retirement income and strengthen protection for the senior population.

The FSC announced on the 9th that it finalized the contents of the "Future Outlook and Competitiveness Evaluation of the Insurance Industry" at the Financial Industry Competitiveness Evaluation Committee meeting held the previous day.

The meeting was held to assess the future competitiveness of the insurance industry. The FSC had previously stated in November last year that it would evaluate the insurance industry first to revise related regulations in line with the financial environment.

At the meeting, the future outlook and competitiveness evaluation of the insurance industry were finalized. Participants recognized the current situation as a trend of low growth and low interest rates, demographic changes, and digital technology innovation, and predicted that if the industry does not respond quickly to the changing environment, the profitability and growth potential of the insurance sector will decline in the long term.

By sector, the life insurance market was evaluated as a competitive market from the supply side. However, survival insurance products such as health, accident, and pension insurance, as well as savings-type products like variable insurance, were analyzed as concentrated markets with high market concentration. In the non-life insurance market, general insurance was identified as a concentrated market, while automobile and long-term non-life insurance were considered competitive markets.

Based on these evaluation results, the FSC proposed measures to promote competition from both supply and demand perspectives. To enhance supply competitiveness, a policy research project will be conducted in the first half of the year, and detailed plans to relax the one-license-per-company policy will be prepared. According to regulations, a financial group must merge in principle to acquire a new insurance company, and to hold multiple licenses, sales channels must be separated.

Additionally, the FSC plans to improve systems together with the insurance industry to activate pensions, variable insurance, insurance products specialized for the elderly, and insurance for chronic disease patients using health data.

Furthermore, ahead of the introduction of the so-called mini-insurance business specializing in small-amount short-term insurance scheduled for June, industry briefings, opinion gathering, and demand surveys will be conducted in the second quarter of this year.

An FSC official stated, "We plan to concretize the policy tasks presented in the future outlook and competitiveness evaluation of the insurance industry and reflect them in the 'Insurance Industry Trust and Innovation Roadmap' to be announced later this month."

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