Transcript Potential Impact towards Financial Market Development through

Potential Impact towards Financial Market Development
through Insurance Industry Expansion
Speaker: Jung-taeg (James) Chang, MBA
Title: KOICA Advisor
Portfolio of Overall Operating Assets of Korean Insurance Companies (FY 2014)
Unit: Billion USD
Cash & Deposits
Securities
& Stocks)
(Bonds Loans (personal & cor
Real Estate
porate)
Total
Life Insurance
14.8
Companies
3.1%
358.8
75.4%
88.71
18.7%
13.3
2.8%
475.61
100%
Non-Life Insu
rance Compan 8.20
ies
5.6%
95.3
64.6%
38.07
25.8%
5.85
4.0%
147.42
100%
Total
3.7%
454.10
72.8%
126.78
20.4%
19.15
3.1%
623.01
100%
22.98
(Note)
Overall Total Assets (Operating + Non-Operating)
Life Insurance: 500.38 billion USD
Non-Life Insurance: 173.73 billion USD
Combined Assets Amount: 674.11 billion USD
Classification of Insurance Providers
Category in terms of Operating Entity
1. Government
- Social Insurance: National Pension Plan, National Health Care Program, etc..
- Mandatory Insurance: Compulsory Car Third Party Liability Insurance, etc..
2. Private
- Non-Life Insurance Companies: Property/Casualty
- Life Insurance Companies: Annity, Early-Death Protection (EDP), Endowment (Savings/EDP)
- Health Insurance Companies: Sickness, Disease, Disability
3. Government/Private
- Reinsurance
- Surety: Credit Guarantee
Assistance of Social/Private Insurance Scheme to National Wealth Growth
1. Enhancement of Social Welfare
- Social Insurance: direct contributor
- Private Insurance: supplementary contributor
2. Sustainability of Dynamic Corporate Activities
- Sustainable Business Performance Anticipation through Insurance Protection
- Easy Loan to SME through Surety Guaranty Provision to Financial Institutions
3. Supply of Gigantic Investing Capitals into Domestic Financial Market
Characteristics of Insurance Business
1. Statistics Business
- Data: Raw Sources
- Information: outcome from Data Process
- Decision-Making for Strategy Development
2. Probability / Statics Techniques Business
- Analysis
- Forecasting
3. Underwriting Skills Business
Process of Insurance Cost (premium) Determination
- In the first place, Assumed Cost applied, which was
presumed by a few past years’ statics data
- At the end, Actual Cost determined by I/O bottom-line,
which was incurred during insurance contract period
Benefits from DB (Data Base) Quality Management
1. Precise Cost (Premium) Assumption
2. Effective/Efficient Decision-Making
3. Stable Profit Maintenance Management
4. New Market Opportunity Development
Insurance Industry Expansion vs. Financial Market Growth
Insurance sector can be contributable to the growth of the domestic
financial market by supplying large investing money into the
capital market, which are internally retained or reserved while
doing insurance business.
How to Produce Substantial Investment Capital?
- By continuous underwriting (insurance) business expansion
into the current market
- By penetrating into new or emerging markets through new
products development such as long-term insurance products
Preconditions for Sustainable Growth of MN Insurance Industry
1. Centralized Insurance DB Research & Development Institution
Establishment
2. Persistent Actuary Cultivation and Capacity Improvement
3. Underwriting Skills Advancement for the sake of Current
Market Growth and Emerging Markets Development
Wrap-up
Well-Prepared
Statistics/Data
Well-developed
Actuarial Capacity
Well-Advanced Underwriting
Skills
* Penetration of New Market (Market Opportunities)
* Sustainability of Current Market Growth
Increase of Operating Assets of MN Insurance Industry
year by year
Able to Supply More Capitals into MN
Financial
Market every year => Supportable to MN Financial
Market Development