Insurance companies set to explore new markets in healthcare and companion animals

Insurance companies in Korea will soon have the opportunity to explore new business ventures, including medical care, healthcare, and services for companion animals, as financial authorities broaden the scope for insurers to operate subsidiaries.

The Financial Services Commission revealed key future initiatives for the insurance industry, discussed during the 7th Insurance Reform Committee meeting. These initiatives are centred on addressing three major shifts: population changes, climate challenges, and technological advancements.

Authorities highlighted the urgent need for the insurance industry to adapt to the rapidly evolving demographic landscape.

As the ageing population grows, with projections indicating that 40% of the population will be elderly by 2050, demand for traditional insurance products is expected to decrease. This demographic shift poses a significant challenge to the profitability of insurance companies.

In response, authorities plan to expand the range of subsidiaries that insurance companies can operate. This move is aimed at ensuring that insurance firms can develop sustainable business models to effectively serve consumers.

Insurance companies will be permitted to offer medical care through their subsidiaries. Specifically, the nursing industry stands to benefit by improving profitability through the integration of nursing facilities and healthcare services. For instance, if an insurance company’s nursing subsidiary is involved in the production and distribution of senior nutrition products, it could offer tailored meals based on the personal data collected by the subsidiary.

The establishment of nursing facilities by insurance companies will also be encouraged. To facilitate this, authorities plan to relax restrictions that previously limited operations to 100% nursing facility management. The new system will allow for greater flexibility in the operation of these facilities, enabling more diverse business models in response to land use limitations.

Additionally, subsidiaries focused on the management of welfare facilities for the elderly, such as silver housing, will be permitted to launch. Pet-related businesses, including pet insurance subscriptions, hospital bookings, and insurance claims, will also be allowed to offer a full-service platform covering the entire process.

Authorities anticipate that these system changes will encourage insurers to take a more proactive role in helping individuals plan for retirement, enhancing their offerings to better meet future needs.