Ahn Cheol-gyeong, head of the Insurance Research Institute, announced plans to develop an "Insurance Trust Index" for consumer understanding on the 26th.
On this day, Ahn noted at a press briefing held at the Insurance Research Institute in Yeongdeungpo-gu, Seoul, that "long-term research will be conducted with the aim of releasing the Insurance Trust Index."
He said, "The insurance industry's environment faces two aspects: a low-interest and high-exchange rate economy and global megatrends," adding that "low-interest rates and high exchange rates will pressure the liquidity of the insurance industry, and an economic recession will dampen insurance demand, necessitating crisis management analysis and preparation for stable maintenance and capital and liquidity management."
He continued, "There is a need to strengthen capabilities regarding population, climate, and technological changes, which will demand innovation in the insurance industry," noting that "with an increase in consumer needs, the insurance industry is expected to be constantly tested for value enhancement."
He also mentioned three challenges faced by the insurance industry: ▲ business models ▲ innovation considering risk ▲ rebuilding trust.
Regarding the first challenge, he stated, "To respond to technological changes, innovation in product development, such as premium calculation reflecting future predictions, is necessary," citing the recent fire in Los Angeles as an example where insurance price assessments were allowed through disaster predictions.
He also mentioned that "after entering the market, active regulations proportional to company size should be introduced to encourage participation from various suppliers and market segmentation," adding that "the participation of diverse entities can foster competitive innovation."
Furthermore, he pointed out that for stable long-term contract retention rates and specialized strategies for product management to establish large-scale funds, insurance companies must strengthen their competitiveness in the asset management field.
On innovation considering risk, he remarked that "new accounting standards (IFRS 17) are systems that immediately recognize the risks of insurance contracts, and there needs to be deep consideration of profitability and soundness," noting that "since it reflects the actuarial assumptions and economic assumptions at the current time, products with a low risk in the past may be recognized as high risk."
He further mentioned that "it is necessary to facilitate voluntary restructuring for loss contracts among the held contracts" and that "operating a joint platform with asset management capabilities that can realize economies of scale should also be considered."
In discussing rebuilding trust, Ahn stated that "establishing trust in insurance transactions must start with understanding consumers," adding that "while reforming sales channels was an issue in a supplier-driven market, understanding consumers will now become a primary task."
He also emphasized that "understanding consumers must become central to insurance marketing," noting that "assessing consumer risk tolerance should be regarded as important not only for investment product selection but also for insurance selection."
Finally, he stated that "the Insurance Research Institute plans to conduct research starting from consumer understanding with the long-term goal of releasing the Insurance Trust Index."