Non-life insurers urged to find new markets
General Insurance Association of Korea Chairman Kim Yong-duk said non-life insurers should now look for new markets to overcome their deteriorating business environment.
Kim stressed it is now impossible for insurers to enjoy sustainable growth if they do business depending on old ways.
“Firms won’t meet customer standards anymore if they persist in using conventional business methods,” said he during a media conference at the lobby group’s office in Seoul, Wednesday.
“It is the most important task for us to find new markets and business methods to overcome the worsening business environment.”
He also mentioned the car insurance sector, which sustained heavy losses due to growing maintenance and repair service fees.
“The nation’s non-life insurers are likely to sustain 700 billion won ($624.9 million) worth of losses this year,” he said.
“However, we can’t just simply raise premiums to cover the losses. We also need to share the burden of the economic slowdown. We should also listen to media. Options are to closely monitor some insurance fraud and unnecessary expenditure.”
The nation’s non-life insurers said they will raise their car insurance premiums by 3 percent this month.
“I believe even the 3 percent hike isn’t good enough to cover firms’ mounting losses,” said an industry insider who asked not to be named.
“Financial authorities and media are, however, not supportive of the premium hike. Some insurers could go out of business under the current business environment.”