Insurance Industry Establishes 30 Billion Won Mutual Growth Fund to Support Small Businesses and Address Low Birth Rate

Operation of Mutual Growth Fund for Three Years
Six Insurance Products, Including Credit Insurance, Provided Free of Charge
Mutual Growth Fund Support Ratio Differentiated by Region

The insurance industry has established a 30 billion won mutual growth fund to provide six insurance products free of charge over the next three years, aiming to support the recovery of small business owners and address the low birth rate.

On August 26, the Financial Services Commission announced this decision after holding a "Mutual Growth Insurance Product Activation Agreement Ceremony" with the Life Insurance Association, the General Insurance Association, and the heads of major insurance companies.

Recently, the difficulties faced by ordinary citizens have intensified due to high inflation and an economic slowdown. Small business owners have also suffered significant damage from natural disasters such as heavy rains and heatwaves. The burden of living expenses and insurance premiums has made it difficult for ordinary people to purchase and maintain insurance policies.

In response, the insurance industry, in cooperation with the Financial Services Commission, has developed a plan to operate mutual growth products that fully subsidize insurance premiums for essential policies for ordinary citizens and small business owners. This follows the securitization of death benefits and is the second policy under "Sosogeum" (Finance That Makes Consumers Smile). This initiative will be formally launched through the agreement signed on this day.

Daeyoung Kwon, Vice Chairman of the Financial Services Commission.

Six "plus alpha" products have been selected as mutual growth insurance offerings, targeting the recovery of small business owners and efforts to overcome the low birth rate, where insurance can provide effective support. These mutual growth products include: credit insurance, accident insurance, climate insurance, disaster insurance, fire insurance, and multi-child safety insurance. The industry plans to continue developing new products, expanding both the list of mutual growth products and the range of coverage.

The insurance industry will operate these fully subsidized mutual growth products for three years, supported by a mutual growth fund totaling 30 billion won (15 billion won from life insurers and 15 billion won from general insurers). This initiative will be implemented in cooperation with all 17 metropolitan and provincial governments to offer tailored support projects that reflect local characteristics. To maximize the effectiveness of the program, some local government resources will be utilized. Local governments can propose or select mutual growth products based on their economic situations and unique characteristics. To promote balanced regional development, the proportion of support from the mutual growth fund will be adjusted by region, with a higher support ratio for areas experiencing population decline.

The financial authorities expect that operating these mutual growth products will help small business owners recover from natural disasters and the practical challenges of economic activity. The initiative is also expected to help vulnerable groups receive medical treatment with peace of mind. The insurance industry anticipates that the operation of these mutual growth products will serve as an opportunity to restore public trust in the insurance sector, and that lesser-known products such as credit insurance and climate insurance, which have seen low subscription rates, will become more widely adopted.

Daeyoung Kwon, Vice Chairman of the Financial Services Commission, stated, "If the intense insurance reform meetings over the past year have laid the foundation for public trust, these mutual growth insurance products will mark the starting point for earning the hearts and confidence of the people." He added, "The financial authorities will continue to pursue a variety of 'Sosogeum' policies for the public and will actively support the activation of mutual growth insurance products through legal, institutional, supervisory, and practical measures."