As economic uncertainty increases this year, there are rising analyses indicating a need for insurance companies to enhance management efficiency and strengthen liquidity monitoring.
On the 5th, the Research Institute stated in its report on "Key Issues in the Insurance Industry for 2025" that "due to increased economic uncertainty, the growth of the insurance industry is expected to be limited this year." The institute noted that "as a decline in interest rates is anticipated, insurance companies need to strengthen interest rate risk management," and explained that "economic slowdown and recession could lead to reduced insurance demand and increased cancellation rates, making it necessary to enhance liquidity monitoring."
Regarding the strong dollar, it added, "Risks may arise during the process of extending the maturity of foreign exchange hedge derivatives, so it is essential to readjust the foreign exchange hedge period and means in consideration of macro financial conditions." The institute expects that while domestic demand will improve moderately this year, the pace of export growth will slow, leading to an economic growth rate of about 2%, which is somewhat lower than last year.
It was pointed out that while the yield on 10-year Government Bonds is expected to reach the mid-2% range by the end of this year, concerns over economic recession could put downward pressure, keeping market rates at a lower level than previously anticipated.
Concerning the new accounting system for the insurance industry, IFRS17, the Research Institute emphasized that "a comprehensive management system must be established from this year to enhance the reliability of actuarial assumptions derived by each insurance company." It further explained that "the evaluation standards for insurance liabilities should be specified to enhance comparability and transparency among companies."
Regarding insurance recruitment, it mentioned that "as economic uncertainty is expected to increase, excessive competition centered on commissions should be avoided, and business expenditure in the recruitment market should be rationalized." In relation to the reform of the medical expense insurance system, it suggested that "by increasing out-of-pocket costs, moral hazard should be mitigated, and the effectiveness of policies should be strengthened through the reform of insurance products linked to health policies."