Chairman Lee Soo-chang of the Korea Life Insurance Association (KLIA) said recently that life insurance policies should be the means to ensure a stable life for everyone after retirement, as not enough people are entitled to the national pension.
During a media briefing on July 14, the KLIA chairman said he will do his best to make society understand that life insurance policies can be the primary means to ensuring a stable post-retirement life for the elderly, and therefore, people should prepare for their retired lives with insurance policies before their retirement.
He said Korea will become a “senior-aged” society in 2017, and in 2026, the country will be considered a “super old-aged society.” He added that he has a lot to do to prepare for the situation, and the country is far from ready for this eventuality. He said every working person should know that he or she has to be ready for life after retirement, and life insurance is an important element of that plan.
Judging by current population trends, the elderly population will increase explosively, boosting welfare payouts exponentially.
He questioned how the country can take care of old people while the number of people paying taxes is falling every year.
The chairman noted that Greece’s excessive welfare measures brought it to the brink of national default. He also noted his national mission to ease the county’s welfare burden to brighten the national future.
Lee launched a task force in the KLIA across the nation on July 3 to discuss “life after retirement.” He said life insurance firms should develop effective life insurance products and the government, too, should provide better official support to the people to prepare for their retired lives, such as tax incentives.
He cited as an example how Germany subsidizes low-income people to buy post-retirement insurance policies, while the U.S. cuts taxes for people over 50 if they buy insurance policies to help sustain their retired lives.
People should not put off preparing for their retired lives.
The Korea Life Insurance Association (KLIA) was established in 1950 as a non-profit corporation and has remained committed to promoting common benefits for member companies and maintaining market discipline. In addition, it has contributed to the development of the life insurance culture. KLIA has 22 life insurers as full members and 2 associate members, Korean Re and IBK Pension Insurance.
Korea Life Insurance Industry
The momentum for the growth of the life insurance industry in Korea kicked off in earnest in the 1960s, when the Insurance Business Law was enacted and savings campaigns for Korean citizens were implemented. Steps to deregulate the insurance industry were taken in the mid-1980s, allowing in new companies into the Korean market.
In the 1990s, the World Trade Organization was formed and Korea joined the OECD, accelerating the nation's globalization and deregulation.
In the 2000's, Korean life insurers enhanced financial strength and competitiveness by achieving management innovation, improved financial structure, and introduced advanced systems for international conformity. They are making forays into foreign markets including China and India.
The Korean life insurance industry recorded 89 trillion won in annual premiums received and 497 trillion won in total assets as of the end of March 2012, making it the world's eighth largest market.
The Future of Life Insurance Industry
In step with ongoing market trends toward specialization and diversification, the KLIA pledges its upmost efforts to contribute to developing the life insurance industry into the core industry armed with global competitiveness and universal banking insurance function through the spread of sound life insurance culture, future-oriented and advanced system and product development.
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