KB Insurance Applies for 'Collective Investment Securities Brokerage' License from Financial Authorities (Comprehensive)
Purpose of Selling Financial Products to Retirement Pension Customers
[Asia Economy Reporter Ki Ha-young] KB Insurance has applied to the financial authorities for approval to conduct collective investment securities brokerage business.
According to the industry on the 10th, KB Insurance submitted an application for approval to the Financial Services Commission on the 6th to engage in financial investment business. This brokerage business involves buying and selling financial investment products with investors' consent, and the products handled are collective investment securities such as funds. It is reported that KB Insurance applied for financial investment business approval to sell financial products to retirement pension customers.
If approved by the financial authorities in the future, it is expected that growth through customer acquisition will be possible in the expanding retirement pension market. According to the Financial Supervisory Service's Integrated Pension Portal, KB Insurance's retirement pension reserves in the second quarter of this year amounted to 2.8483 trillion KRW, an increase of 4.4% (119.1 billion KRW) compared to the same period last year.
The retirement pension market is showing growth. As of the second quarter of this year, the total amount of retirement pension reserves managed by 43 financial companies was 260.3689 trillion KRW, an increase of 16.8% (37.3458 trillion KRW) compared to the second quarter of last year (223.0231 trillion KRW).
However, the insurance industry is criticized for lagging behind other sectors such as financial investment and banking in terms of growth. This trend is particularly noticeable in the rapidly growing Individual Retirement Pension (IRP) market. As of the first half of this year, bank IRP reserves increased by 36.1% to 27.7946 trillion KRW compared to the same period last year, securities companies increased by 62.9% to 10.1516 trillion KRW, but insurance companies' reserves only increased by 9.1% to 3.0908 trillion KRW.
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Returns are also sluggish compared to financial investment businesses. Over the past year, the operating yields for financial investment businesses were highest with DB type (1.72?6.70%), DC type (4.85?17.62%), and Individual IRP (3.68?21.00%). Insurance achieved DB type (1.57?2.89%), DC type (2.12?6.51%), and Individual IRP (1.92?10.48%). Amid a booming stock market and aggressive marketing by securities companies attracting many retirement pension subscribers, there are calls for insurance companies to strengthen related areas as well.
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