Accounting Changes in the Insurance Industry: Explosive Demand for This Certification Starting Next Year...

[Asia Economy Reporter Changhwan Lee] Starting next year, the accounting standards in the insurance industry will undergo significant changes, leading to a sharp increase in demand for insurance actuaries, who are experts in insurance accounting. Insurance companies are actively securing personnel by supporting their employees' qualification exams to increase the number of insurance actuaries.

According to the industry on the 5th, major insurers such as Hanwha Life and Tongyang Life gave special leave to employees preparing for the second insurance actuary exam at the end of last month, allowing them to focus on the exam.

An insurance actuary is an accounting expert who develops insurance products or calculates rates and amounts related to insurance. To obtain the certification, one must pass exams in two stages: the first and second exams. Employees who have worked in actuarial tasks at an insurance company for more than five years are exempt from the first exam, so many insurance company employees aim to acquire the insurance actuary certification.

Hanwha Life conducted a Job-off course last month for 13 employees preparing for the second insurance actuary exam. During the Job-off period, they stayed at the Yongin Life Park instead of the headquarters at the 63 Building, dedicating themselves solely to studying for the certification. Since it was a Job-off, they received their salary and allowances without working. Hanwha Life also operates an in-house insurance actuary preparation class to help employees obtain the actuary certification.

Tongyang Life also provided up to five days of special leave last month for employees preparing to obtain the insurance actuary qualification. This allowed employees facing the second exam to concentrate on their final studies. Both Hanwha Life and Tongyang Life reportedly had their CEOs personally encouraging and supporting employees in obtaining the actuary certification.

The reason insurance companies actively support their employees in acquiring the insurance actuary certification is to prepare for the new International Financial Reporting Standard (IFRS 17) and the new Solvency II system (K-ICS) to be introduced next year.

With the introduction of IFRS 17, liabilities will change from cost-based to fair value measurement. Accordingly, insurance companies must evaluate cash flow inflows and outflows over the entire insurance period, and continuously reassess premiums, claims, and reserves, significantly increasing accounting tasks. Actuarial assumptions are also needed for lapse rates and payment rates, and models for cash flows must be created, greatly increasing actuarial work.

Insurance companies have steadily increased the number of insurance actuaries ahead of the new accounting standards. According to the Financial Supervisory Service, as of the end of last year, the number of insurance actuaries at 39 domestic insurance companies was 1,141, a 24% increase compared to five years ago.

Nevertheless, the industry evaluates that insurance actuaries are still insufficient. It is predicted that the introduction of the new accounting standards will create additional demand for hundreds of insurance actuaries. Accordingly, it is expected that insurance companies will more actively support their employees in obtaining actuary certifications in the future.

An insurance company official said, "With the significant changes in insurance companies' accounting systems starting next year, a large number of insurance actuaries will be needed," adding, "The company is also actively recruiting personnel."

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