DB Insurance will enter the trust business to strengthen its competitiveness in the retirement pension business.
According to the insurance industry on the 28th, DB Insurance recently decided to pursue the retirement pension trust business and applied to the financial authorities for a business license.
A trust is a financial services business that manages assets entrusted by customers according to the agreed purpose and charges a fee. An insurer that has obtained a trust business license can, under contract, invest retirement pensions not only in its own products but also in products from other sectors such as bonds, corporate bonds, and equity-linked securities (ELS).
The trust business also reduces required capital for insurers. When an insurer manages retirement pensions with its own products, the funds are recognized in accounting as a liability to be returned to customers. If retirement pensions are managed through a trust, they are handled under trust accounting and are not included in the insurer's retirement pension account. They are also excluded from the calculation base for required capital under the new risk-based capital regime (K-ICS).
Insurers that currently also operate the trust business include Samsung Life Insurance, Hanwha Life, Kyobo Life Insurance, Heungkuk Life Insurance, Mirae Asset Life Insurance, Samsung Fire & Marine Insurance, and KB Insurance.