South Korea’s Financial Supervisory Commission (FSC) has announced that it would lower the entry barriers for reinsurers as it aims to encourage the establishment of new players in the country’s reinsurance market.
The commission’s move, announced on 4 June, is intended to revitalise competition among non-life insurers in Korea. Currently, the market is dominated by Korean Re.
According to a report in Business Korea, there is currently almost no price competition among domestic non-life insurers in South Korea, who all use the same insurance premium rates provided by reinsurance companies or the Korea Insurance Development Institute.
The incorporation of further reinsurers is expected to stimulate price competition by pushing non-life insurers to improve their capacity to assess corporate risks.
Until then, insurers will continue to calculate premiums based on their own underwriting experience and statistics, as well as the premium rates provided by the Korea Insurance Development Institute.
South Korea's insurance law will be amended to allow the liberalisation move. The amendment to the law will be drafted in the first half of this year and the FSC will push for its enactment in the second half of the year.
South Korea’s Financial Supervisory Commission (FSC) has announced that it would lower the entry barriers for reinsurers as it aims to encourage the establishment of new players in the country’s reinsurance market.
The commission’s move, announced on 4 June, is intended to revitalise competition among non-life insurers in Korea. Currently, the market is dominated by Korean Re.
According to a report in Business Korea, there is currently almost no price competition among domestic non-life insurers in South Korea, who all use the same insurance premium rates provided by reinsurance companies or the Korea Insurance Development Institute.
The incorporation of further reinsurers is expected to stimulate price competition by pushing non-life insurers to improve their capacity to assess corporate risks.
Until then, insurers will continue to calculate premiums based on their own underwriting experience and statistics, as well as the premium rates provided by the Korea Insurance Development Institute.
South Korea's insurance law will be amended to allow the liberalisation move. The amendment to the law will be drafted in the first half of this year and the FSC will push for its enactment in the second half of the year.
