Chung Hee-soo, the 35th chairman of KLIA, delivers his inaugural speech in KLIA Auditorium in Jung-gu, Seoul on Dec. 9. (Photo: KLIA)

The Korea Life Insurance Association (KLIA) held an inauguration ceremony for Chung Hee-soo, the 35th chairman, at the association’s auditorium in Seoul on Dec. 9.

“The financial environment surrounding the life insurance industry is rapidly changing due to the 4th Industrial Revolution, the expansion of fintech’s impact and the introduction of new financial regulations,” Chairman Chung said in his inaugural address.

Korean life insurers may face enormous challenges over how to survive in the current turbulent era of digital finance and the COVID-19 virus in the financial market, according to Chung.

Chung presented three key initiatives for overcoming the current crisis and maintaining the sustainable growth of the life insurance industry.

“For the sustainable growth of the life insurance industry amid these difficulties, we will focus on three key tasks,” Chung said. “First, I will try to restore customers’ trust in the life insurance industry.”

In particular, life insurance products, unlike other financial products such as deposits, installment savings, and funds, form long relations between customers and life insurance companies as they stay valid for multiple years or decades.

“It is not an exaggeration to say that strengthening customers’ trust in life insurance is the top priority of life insurers,” Chung stressed.

“As we have enhanced the image of the life insurance industry by spearheading a campaign to return unpaid insurance money to customers who forget about their insurance policies and creating a sound insurance sales culture, we will promote environment, social, corporate governance (ESG) management eco-friendly, social responsibility, and transparent governance as core values,” Chung added.

“Second, I will work hard to increase the competitiveness of the Korean life insurance industry,” Chung underscored.

“The fourth industrial revolution represented by artificial intelligence (AI) and big data, is accelerating the digitalization of the financial industry in the wake of the COVID-19 pandemic.”

Despite the recent trend of consumers' preference for non-face-to-face methods, the life insurance industry still has difficulty carrying out sales activities using digital technology due to the government’s face-to-face sales-oriented regulatory systems.

“Therefore, we will improve regulations in order to make non-face-to-face and digitalization possible throughout all of our business areas from signing insurance contracts to paying insurance money by consulting with the National Assembly and government authorities,” Chung said.

“In addition, we will strive to strengthen the roles of life insurance as a social safety net to enable the people to make retirement income and pay medical expenses in the aging society of Korea.

“The deepening of problems such as the nation’s shrinking birth rate and aging population makes it difficult for the government alone to meet senior citizens’ demand for welfare.

No financial instruments are as good as life insurance policies as a tool to generate stable income and a preparation to pay increased medical expenses for the elderly,” Chung stressed.

“Life insurers will strive to expand tax benefits for the people's retirement lives and strengthen the roles of life insurance policies in Korea facing the aging problem of the people by developing various products and services in consumers’ shoes.

“Third, we will push for the expansion of the life insurance market for the purpose of promoting the sustainable growth of the Korean life insurance industry,” Chung continued.

“We will step up our efforts to expand the Korean life insurance market with the goal of generating stable future profits for the Korean life insurance industry. One of the good examples is the development of customized insurance policies using medical big data from public institutions.”

Life insurers will spare no efforts to bring benefits to the nation and consumers by making good use of big data in the era of the fourth industry revolution according to Chung.

By utilizing medical big data, life insurers can develop a variety of insurance policies to create more benefits for consumers.

At the same time, life insurers help the government keep the national health insurance program financially sound by preventing con artists from committing insurance frauds and people from unreasonably using medical services among others, Chung explained.

“Moreover, we will discover and implement tasks for expanding the life insurance market from mid- to long-term perspectives such as revving up health care services and expanding ancillary services,” Chung said, wrapping up his inaugural address.

New chairman Chung’s term will run for three years, until Dec. 8, 2023.