[Asia Economy Reporter Kim Hyo-jin] On the 25th, the Financial Services Commission held a meeting on the future outlook of the financial industry and competition evaluation, chaired by Vice Chairman Do Gyu-sang, to discuss measures for building financial infrastructure suitable for the Fourth Industrial Revolution era.
The meeting was attended by 12 new evaluation committee members (2nd term), including Chairman Han Ki-jung (Seoul National University professor), who discussed the results of the insurance industry competition evaluation presented by the Korea Insurance Research Institute.
The attendees forecasted that due to aging, low interest rates, and low growth, the development of elderly health management products and the strengthening of asset management functions will become the core of the insurance industry.
Accordingly, they pointed out that various products should be developed and policy support and improvements in sales regulations should be reviewed to promote service innovation for supporting increased personal retirement income and ensuring healthy old age in the variable insurance and survival insurance (health and accident) markets.
The financial authorities plan to announce measures to create future growth engines for the insurance industry, such as healthcare, after additional meetings by January next year.
The committee members also discussed fair competition measures in response to the entry of big tech and other platforms into the insurance industry.
While the entry of platforms into the insurance industry has positive effects such as expanding consumer choice, there were calls for a regulatory system to govern the dominant market structure.
Discussions also covered promoting the entry of insurtech (insurance fintech) companies, revitalizing small-amount short-term specialized insurance, and flexibilizing the one company one license policy.
In particular, an exception to the current 'one company one license' principle was suggested to respond to changes in the insurance environment, such as insurance product innovation, asset and liability management, and enhancing organizational flexibility.
The financial authorities plan to evaluate the competitiveness of the financial industry in the order of insurance (within this year), credit rating (first half of next year), and banking and credit cards (second half of next year).
Especially for banking, the evaluation will cover profitability prospects due to the entry of new services from fintech and big tech, the impact on banks and regional banks, and the necessity of new entries by internet-only banks.
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