The Financial Supervisory Commission (FSC) has announced that it would lower the entry barriers for reinsurers to South Korea as it aims to encourage the establishment of new players in the market.
The commission’s move, announced on 4 June, is intended to revitalise competition among non-life insurers in Korea, reports Business Korea. Currently, the market is dominated by Korean Re.
According to the FSC, there is no or little price competition at present among domestic non-life insurers as they use the same insurance premium rates provided by reinsurance companies or the Korea Insurance Development Institute.
The presence of multiple reinsurers is expected to push non-life insurers to improve their capacity to assess corporate risks, thus stimulating price competition in the sector.
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.