On the 5th, Korea Investment & Securities reaffirmed its focus on the insurance sector. The firm believes that the recent rise in insurance stocks is not a temporary event but reflects lasting structural changes. A key factor is the increase in government bond yields, especially long-term bonds, which has boosted investor confidence in line with the government’s fiscal policies.
Hong Ye-ran, a researcher at Korea Investment & Securities, pointed out three major policy promises from the Democratic Party of Korea that directly affect the insurance industry. These include protecting policyholders’ rights, stabilizing health insurance finances, and easing medical costs. Corporate governance improvements are also part of the plan.
Hong emphasized that the introduction of optional agreements for actual loss insurance coverage is a positive development for non-life insurance companies. This option would allow policyholders to exclude unnecessary treatments and reduce their premiums.
The policy pledge guarantees contracts for first and second generation actual loss insurance while adding the option to lower premiums by excluding non-essential treatments. Hong explained that this change is expected to reduce unnecessary medical use, especially for initial actual loss insurance policies. Over the medium to long term, this reform should improve the loss ratio for non-life insurers, strengthening the sector’s outlook.
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