Insurance companies are accelerating their entry into the nursing industry ahead of entering an ultra-aging society. The life insurance industry's leader, Samsung Life Insurance, is showing active movement by jumping into the nursing sector.
According to the insurance industry on the 9th, Samsung Life Insurance, the leader in the life insurance sector, has recently upgraded its senior living task force to the Senior Biz Team. This team was initially created under the planning department to review senior business last year. The industry assesses that companies are strongly diversifying their business due to the difficulty in generating revenue solely from their main businesses in the domestic market.
Following Shinhan Life and KB Life Insurance, Hana Life has also recently decided to enter the nursing industry at its board meeting. Similar to previous attempts, Hana Life plans to establish a subsidiary related to nursing and launched its day care service in the second half of this year. Hana Life plans to construct a premium nursing facility near Seoul in the second half of 2026.
Shinhan Life established its senior subsidiary, Shinhan Life Care, and opened its first long-term care facility, 'Bundang Day Care Center,' in November last year. The company aims to provide a 'total life care' service for seniors. Additionally, after changing its healthcare subsidiary, Shinhan Cube On, to the senior business subsidiary Shinhan Life Care, Shinhan Life is putting efforts into expanding its facilities.
KB Life Insurance's subsidiary, KB Golden Life Care, was established in 2016 as the first nursing facility business company in the financial industry and opened the Gangdong Care Center for day and night care in 2017, followed by Warye Village in 2019 and Seocho Village in 2021. Next year, there are plans to create urban-type nursing facilities in Eunpyeong and Gangdong in Seoul, as well as in Gwanggyo, Suwon.
The reason insurance companies are focusing on the nursing industry is due to the new accounting system (IFRS 17) guidelines and domestic and international economic uncertainties, leading to anticipated deterioration in the insurance market starting next year. Historically, insurance companies primarily sold savings insurance, which has a deposit nature, and whole life insurance, which provides death benefits. However, the business environment has deteriorated significantly due to factors such as low birth rates and aging population. Furthermore, with the introduction of IFRS 17, the profitability of savings insurance, the main product, has greatly decreased.
However, a concern has been raised that the current law requires operators to directly own land or buildings or lease public land when establishing nursing facilities, as these expenses are burdensome for insurance companies. According to the current enforcement rules of the Elderly Welfare Act, to establish a nursing facility for more than 30 people, operators must either directly own the land and building or lease public land. In particular, securing land and construction costs significantly increase when establishing nursing facilities in the highly demanded metropolitan area, presenting a barrier to entry.
An industry official noted, 'Although there are several entry barriers, there is an overall challenge for the industry to increase revenue; therefore, the nursing industry is a breakthrough option,' adding that 'more insurance companies may enter this market in the future.'