Kim Cheol-joo, chairman of the Life Insurance Association, announced on the 12th that plans are in place to select three key objectives and nine priority initiatives in response to the rapid changes in the market environment surrounding the life insurance industry.
During a press briefing held that day, Kim noted that the life insurance market is experiencing changes in the macro environment, including concerns over increased interest rate volatility and economic slowdown, as well as potential weakening of the demand base due to market saturation and an aging population. He also explained that new products and services based on technological innovation are emerging, and that there are rapid changes in preferred products and consumption patterns, particularly among the MZ generation and the newly aged, as well as structural changes in sales channels, including the entry of fintech into the insurance industry and the separation of sales and casting.
In response, the Life Insurance Association plans to actively pursue three key objectives and nine priority initiatives to achieve them. The key objectives include stable management support for life insurance companies in response to changes in the financial environment, smooth implementation of the new accounting standards (IFRS17) and solvency ratio system (K-ICS), thorough liquidity and risk management, and promotion of digital transformation across the value chain. Moreover, improvement plans will be prepared that fully consider the rationale for reserves for cancellation refunds and other operations while aligning with value-up policies such as dividends. Additionally, it is planned to reference advanced overseas cases regarding discount rates for insurance liabilities and to propose applicable methods suitable for domestic circumstances to the financial authorities. Institutional improvements for structural enhancement of insurance liabilities, including joint reinsurance and contract repurchases, will also be pursued.
Furthermore, consumer trust will be enhanced through consumer-friendly institutional improvements. This aims to increase consumer trust in line with the characteristics of the life insurance industry's care industry across the entire life cycle. To enhance the accessibility of consumer claims for insurance money trusts, regulations concerning the trust subjects, beneficiary range, and solicitors' qualifications will be improved. In addition, to strengthen the asset management function inherent in trusts, improvements related to comprehensive asset trust regulations will be made, while continuously discovering trust products and services linked to life insurance, such as dementia trusts.
It is also planned to strengthen the role of life insurance in response to the ultra-aged society and to seek new growth drivers. This involves expanding specialized products and care services for the elderly and laying the groundwork for overseas expansion. Additionally, support will be provided for the development of pension products suitable for the ultra-aged era, the expansion of tax benefits for long-term beneficiaries, and the liquidity of death benefits. Efforts will be made to ease regulations on insurance companies' nursing and silver housing businesses. Support will also be provided for the systematic establishment of elderly care services, including the provision of integrated services combining insurance and nursing. Plans to actively support the overseas expansion of life insurance companies will be pursued by expanding exchanges with overseas supervisory authorities and related organizations.
Kim emphasized the need for "objective situational awareness and bold execution" to overcome the difficult internal and external circumstances, stating, "If we approach it with the attitude of 'shooting a stone to make a tiger,' the challenging environment surrounding the life insurance industry will serve as an opportunity for new growth."