Life insurers seek new growth in hybrid, pension markets
In the face of threats of market saturation and a decreasing population in the country, the Korea Life Insurance Association (KLIA) aims to find new growth momentum in the hybrid insurance and pension markets.
“It’s true that the life insurance industry is facing a crisis. While it may be difficult for the life insurance industry to achieve high growth or profitability as in the past, the association plans to achieve a breakthrough,” KLIA Chairman Kim Chul-ju said during a press conference in Seoul, Tuesday.
Acknowledging that the domestic life insurance industry’s growth has been stagnant amid macro-environmental changes, including the low birthrate and rapidly aging population, Kim said that the industry is actively pursuing to increase its market share in the hybrid insurance market.
Hybrid insurance combines the characteristics of fixed compensation in life insurance products and actual expenses compensation in non-life insurance products, and both life insurance and non-life insurance can enter the market. While the market has been yielding a high growth rate of about 7 percent a year, the non-life insurance sector currently takes up over 70 percent of the entire market.
“The life insurance industry has not been able to keep up promptly with risk management and statistical management in the hybrid insurance market,” Kim said.
In order to tackle such challenges, the life insurance association plans to collaborate with the Korea Insurance Development Institute to overhaul the basic statistical management system, hoping to secure flexibility in calculating risk rates and support the calculation of reasonable insurance premiums.
Developing new products with detailed and simplified coverage tailored to the needs of older people, as well as diversifying insurance sales channels utilizing various online platforms are other pathways it chooses to pursue for new growth momentum.