Insurance Industry Shifts Toward Holding Company System... "Capital Power Outweighs Sales Capability"

Active Expansion into New Businesses Such as Senior and Healthcare Services

Urgent Need for Capital Raising for Initial Investment and Long-Term Business

Strengths in Creating Synergy Through Integration with Banking, Card, and Securities Businesses

Recently, there has been a growing consensus in the insurance industry that the era of stand-alone insurance companies is coming to an end, and that management systems centered around financial holding companies are becoming increasingly dominant. Some in the industry have even described this as a complete shift in the “survival formula” for the domestic insurance sector, with the pace of paradigm change accelerating rapidly. Unlike the past, when large-scale agent networks and sales power were the primary drivers, capital strength, platform competitiveness, and group-level synergies are now emerging as the new core factors.

"Difficult to Achieve Long-Term Growth Through Product Sales Alone"

Dongyang Life Insurance Headquarters, Jongno-gu, Seoul. Dongyang Life Insurance

According to the insurance industry as of May 24, insurance companies are currently facing a complex set of challenges, including internal and external environmental changes, strengthened regulations, intensifying market competition, and the industry entering a mature phase. As a result, there is a prevailing view that a growth strategy focused solely on selling insurance products is no longer sufficient to ensure sustainable growth.

In particular, recent moves by financial authorities—such as the introduction of the new accounting standard (IFRS17), the strengthening of basic capital regulations centered around the new risk-based capital regime (K-ICS), and the expansion of the “1,200% rule” for corporate insurance agencies (GAs)—are acting as major management variables. The “1,200% rule” limits the commission paid to agents in the first year of selling an insurance product to no more than 12 times the monthly premium.

With the growing importance of long-term investments and large-scale capital deployment in the insurance sector, there is a strengthening view that, without comprehensive support at the financial holding company level, it is difficult to pursue aggressive business expansion that can outpace competitors.

'Holding Company System' Synergy Drives Senior & Healthcare Expansion

KB Life Tower, Gangnam-gu, Seoul. KB Life

Accordingly, as financial holding companies designate the insurance business as a future growth engine and scale up, their affiliated insurers are also accelerating the expansion of new businesses such as senior and healthcare services, as well as overseas market entry.

A prime example is Woori Financial Group, which is accelerating its entry into the insurance sector by pursuing the acquisition of Donga Life Insurance to strengthen its non-banking portfolio. The strong performance of affiliates that have already been integrated into holding company systems also stands out. KB Life Insurance (with subsidiary KB Golden Life Care) and KB Insurance, recognized as leaders in the senior industry thanks to synergy with KB Financial Group, and Shinhan Life Insurance (with subsidiary Shinhan Lifecare) of Shinhan Financial Group, which has grown enough to challenge the traditional “Big 3” life insurers, are all attracting attention with their aggressive management strategies.

In the senior and healthcare sector, KB Life Insurance’s upcoming senior-exclusive platform, “KB Golden Life On,” is drawing attention. This platform has been praised for its differentiated approach by integrating home equity and insurance assets into pension calculation methods for customers. Its key feature is a retirement fund planning system that calculates expected payouts by period when customers input their home value and projected post-retirement income.

Shinhan Life Insurance has also established its subsidiary Shinhan Lifecare and is working to build nursing care facilities in areas such as Eunpyeong-gu in Seoul and Hanam City. Hana Life Insurance, an affiliate of Hana Financial Group, is also attracting industry attention by planning to open its first urban-type nursing facility in Jichuk-dong, Deokyang-gu, Goyang City, Gyeonggi Province, in September 2027 through its subsidiary Hana The Next Life Care.

An industry official commented, “In the past, sales capabilities were the core competitive strength for insurers, but now capital power and platform capabilities are becoming much more important,” adding, “The role of insurance companies is evolving beyond simply selling products to becoming comprehensive financial, senior, and healthcare platforms.”

"Holding Company Structure Also Effective for Overseas Expansion"

Shinhan Life Headquarters, Jung-gu, Seoul. Shinhan Life

The strengths of holding company-affiliated insurers also stand out in terms of overseas business expansion. While domestic insurance companies are seeking to expand abroad, particularly in Southeast Asia, they face difficulties with local regulations, initial investment burdens, and large-scale capital requirements. In contrast, insurance companies under financial holding groups are actively leveraging their group’s global networks to broaden their local business base and are generating synergy by linking with group-level strategies to expand non-banking portfolios.

Another industry official noted, “Insurers affiliated with financial holding companies are betting on the expansion of senior and healthcare businesses as well as overseas market entry. The old management trend of focusing solely on loss ratio management for specific products like auto insurance or indemnity health insurance is a thing of the past.”

This content was produced with the assistance of AI translation services.