Announcement of This Year's 3 Major Promotion Strategies
Strengthening Products and Services for Safety Nets in a Super-Aged Society
Discovering New Growth Engines That Enhance Trust and Ensure Sustainable Growth
[Asia Economy Reporter Minwoo Lee] The Life Insurance Association plans to actively support insurance companies' entry into 'senior care' sectors such as nursing and funeral services as a key task this year. The aim is to enable life insurance to fulfill its fundamental role of caring for individuals throughout their entire lives, from cradle to grave. Analysts suggest this could be a breakthrough for life insurers who are losing new growth opportunities.
On the 13th, Heesoo Jung, chairman of the Life Insurance Association, held a press conference at the Life Insurance Association Education and Culture Center in Jongno-gu, Seoul, presenting the 'three major promotion strategies' that include these plans. The goal is to manage the entire life cycle and expand products and services to respond precisely to social and personal changes.
Chairman Jung stated, "South Korea, which is entering a super-aged society at an unprecedented pace, had an elderly poverty rate of 39.3% in 2021, which is 2.9 times the OECD average of 13.5% (2019)." He emphasized, "As the National Pension is also facing depletion, we aim to reorganize and elevate the role of private sector life insurance, a representative social safety net responsible for citizens' old age, to meet this national crisis."
He particularly stressed helping insurance companies actively enter the 'senior care' market. Plans include proposing amendments to the Enforcement Decree of the Insurance Business Act. Kim Hongjoong, head of strategic planning at the Life Insurance Association, who attended the event, explained, "There are many regulations, such as the requirement to purchase rather than lease buildings when entering the nursing care sector." He added, "We will request regulatory relaxation from authorities to improve profitability and enhance various services including exercise and shopping."
They also plan to demand various improvements related to retirement pensions. To encourage long-term pension receipt, they will seek policy support to increase the retirement income tax reduction from 40% to 50% for periods exceeding 10 years, and up to 70% if choosing a lifetime pension. Additionally, to ease the tax burden on pension income, they plan to propose raising the low-rate separate taxation limit from the current annual 12 million KRW to 24 million KRW.
The industry will also continue to request solutions to the long-standing issue of utilizing healthcare data. Insurance companies have been unable to use public medical data from the National Health Insurance Service due to opposition from the medical community. It was pointed out that the currently accessible medical data from the Health Insurance Review and Assessment Service alone is insufficient to go beyond mere 'health information.' Chairman Jung said, "We will support product and service development by creating conditions for utilizing public medical big data." He explained, "More active use of data could lead to product improvements that offer cheaper premiums or greater coverage."
Other key tasks include ▲supporting the smooth implementation of the new accounting standard IFRS17 and the new solvency regime (K-ICS) ▲normalizing the indemnity insurance system ▲strengthening insurance fraud prevention ▲enhancing the soundness of insurance sales channels.
Chairman Jung stated, "We will focus on establishing institutional foundations for overcoming complex crises and integrated growth, as well as restoring consumer trust, while advancing detailed tasks."
Jung Hee-su, President of the Life Insurance Association (center), is holding a press conference on the 13th at the Life Insurance Association Education and Culture Center in Jongno-gu, Seoul. Photo by Life Insurance Association
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