Insurance Companies Also Nervous in Season 2 of Sangsaeng Finance

Kyobo Life to Unveil Win-Win Finance Insurance Products Early Next Month
Non-Life Insurers Expected to Lower Auto Insurance Premiums Sooner Amid Earnings Boom

As government pressure for win-win finance resumes, insurance companies are becoming tense following the banking sector. It is expected that they will propose measures such as savings insurance favoring vulnerable groups or reductions in automobile insurance premiums.

According to the industry on the 7th, Kyobo Life Insurance is preparing a win-win finance plan targeting early next month. Unlike Hanwha Life Insurance (August) and Samsung Life Insurance (October), which presented no particular measures when the Financial Supervisory Service chief emphasized win-win finance across industries, Kyobo Life is stepping up as the next player. The product Kyobo Life is preparing is a 5-year maturity interest rate-linked savings insurance aimed at self-reliant youth. Specific preferential terms have not yet been disclosed. A Kyobo Life official explained, "The details will be finalized after internal management reporting and regulatory review."

Recently, government pressure for win-win finance appears to be restarting, beginning with the banking sector. The financial authorities plan to meet with the chairpersons of financial holding companies on the 16th, followed by CEOs of banks, insurance companies, and card companies to discuss win-win finance measures.

Non-life insurers, who have not presented any significant win-win finance plans except Samsung Fire & Marine Insurance, are also on edge. Considering their steeper performance growth compared to life insurers, there are concerns that greater demands may be made. The industry expects that after the third-quarter earnings are announced and detailed results are released, the pressure will intensify. Samsung Fire & Marine Insurance and DB Insurance will announce their earnings on the 13th, and Hyundai Marine & Fire Insurance on the 14th.

In particular, the possibility of another round of automobile insurance premium reductions is high. Since automobile insurance is a mandatory product for drivers and its premiums are reflected in the Consumer Price Index (CPI), it is a favorable condition for the government to showcase achievements. Typically, pressure to reduce automobile insurance premiums has been strongest at the beginning of the year following the confirmation of the annual loss ratio (the ratio of paid claims to received premiums), but this year, specific premium reduction measures are expected within the year.

Already, the 'Big 4' non-life insurers?Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and DB Insurance?who hold 85% of the automobile insurance market, recorded an average cumulative loss ratio of 78.3% from January to September this year. Since this is within the breakeven range of 78?82%, the industry views the reduction as inevitable. An industry insider said, "The government is emphasizing win-win finance while criticizing financial companies' profit excesses, so they cannot help but be tense," adding, "Win-win finance plans from insurance companies are expected to be released one after another soon."