Aging twice as fast as Japan’s… Flexible business model and diversification of financial resources are urgently needed[제17회 국제보험산업심포지엄]

The 17th International Insurance Industry Symposium was held at the Park Ballroom of the Conrad Hotel in Yeongdeungpo-gu, Seoul on the 12th, hosted by Financial News and the Insurance Research Institute. A morning panel discussion is being held chaired by Lee Bong-ju, professor of business administration at Kyung Hee University (left). Photo = Reporter Seo Dong-il

[파이낸셜뉴스] As Korea prepares to enter a super-aging society next year, experts agree that it is urgent to discover new growth engines for the insurance industry. It is pointed out that after an accident, the business model should be changed from loss compensation to risk management, and quality improvement of long-term care insurance for the elderly should be made while diversifying financial resources.

Financial authorities suggested alternatives where insurance companies take charge of stable financial resources and the government handles the risks, or where private insurance and public insurance establish a cooperative system.

■The aging rate is twice as fast as that of Japan. A flexible business model is needed.

At the 17th International Insurance Industry Symposium jointly held by Financial News and the Insurance Research Institute at the Conrad Seoul Hotel in Yeouido, Seoul on the 12th, Lee Bong-ju, a professor of business administration at Kyung Hee University, said, “According to recent Swiss statistics, Korea is still ranked 7th among the top 10 insurance countries.” “It means that the Korean insurance market is stagnant and facing a crisis, so it is a time when a new growth engine is very necessary,” he said.

Hong Seok-cheol, a professor of economics at Seoul National University, pointed out that the insurance business model needs to be much more flexible as Korea’s aging rate is more than twice that of Japan.

Professor Hong said, “It took Japan 15 years and Korea 7 years to enter a super-aging society,” and added, “Given that Korea’s current insurance business model is quite fragmented, flexible systems and business models are needed.”

He emphasized that while the traditional insurance business was about compensation for losses after an accident, a new form of insurance should focus on risk management. Professor Hong explained, “In the past, securing the family’s livelihood was important due to the high risk of death, but now, with the extension of life expectancy and the stabilization of the social security system, the demand for coverage or risk avoidance for various risks in daily life is increasing.”

It was also pointed out that qualitative improvement was needed for long-term care insurance for the elderly, which is now in its 16th year of implementation. 1.1 million elderly people are benefiting from the long-term care insurance system for the elderly, which was first implemented in 2008 with the purpose of improving health and quality of life in old age.

However, as financial soundness issues such as savings savings are depleted by 2026 due to increases in insurance premiums and faster payment of benefits than national health insurance, voices calling for system improvement are growing.

Song Yoon-ah, a researcher at the Korea Insurance Research Institute, said, “There are not many countries that have developed long-term care insurance systems as well as Korea. However, as they try to keep up with the pace of aging, there is an aspect that focuses on quantitative expansion.” He continued, “Baby boomers are joining the aging population, and we need to make qualitative improvements in the future.”

In this respect, Commissioner Song argued that private health insurance can become a meaningful player. He said, “In the case of private care insurance, it is clear that there is an effect of reducing prices despite concerns about cost reduction to maximize profits,” and added, “I hope that the financial authorities and the Ministry of Health and Welfare will create a policy plan to harmonize long-term care insurance and private care insurance.” reported.

■Need to diversify financial resources. Securing financial resources for insurance companies and covering government risks

It was also argued that diversification of financial resources is necessary to ensure sustainable provision of elderly care. Professor Hong said, “It is a question of who will create a caring environment and invest in facilities, but there is a financial burden for the government to do it all, and even if an insurance company does it, there are limits because the building installation costs are quite high,” and added, “Specialized real estate investment such as REITs. “By partnering with a company, we will be able to see if we can overcome the blockage,” he said.

However, he added, “The current laws are quite ambiguous, and establishing safety measures by supplementing laws or regulations will help expand the market and allay public concerns.”

Lee Lee, Ahn Chang-guk, director of the Financial Industry Bureau of the Financial Services Commission, emphasized, “It is desirable for insurance companies to play the role of ‘coordinator,'” and added, “It is important to create a structure where public insurance and private insurance can establish cooperation.”

He said, “As the insurance industry is a long-term industry, there is great sensitivity to the future impact of current changes.” He added, “I think it would be more appropriate for the long-term watch industry for insurance companies to become coordinators and manage rather than provide all services.” .

Regarding the issue of diversifying financial resources, he added, “Insurance companies need to unite in a way to create stable financial resources and the government covers risks,” and added, “We are continuously talking about long-term rental facilities and nursing facilities.”

[email protected] Reporter Seo Hye-jin

※ Copyright ⓒ Financial News, unauthorized reproduction and redistribution prohibited