On January 18, 2019, Kim & Chang’s Insurance Practice hosted an international symposium on the theme of “Insurance Industry’s New Leap Through Regulatory Reform: Seeking a New Business Model.”  

The symposium focused on using reinsurance in managing insurance companies’ risk and insurance business innovation based on big data.  Jae Ho Baek, a member of the firm’s Insurance Practice, delivered a speech entitled, “New Leap through Regulatory Reform: Seeking a New Business Model,” in which he presented a capital management method using co-reinsurance.

Mr. Baek pointed out the need for regulatory reform, which would allow insurance companies faced with the need for additional capital as a result of adoption of the new International Financial Reporting Standard for insurance contracts (IFRS 17) and the new insurance capital standard (K-ICS), to manage their risk using co-reinsurance.  Also, he highlighted the need to allow risk transfer through co-reinsurance to effectively manage risks associated with savings insurance premiums for life insurance and long-term non-life insurance, stating that in practice, reinsurance is allowed for only risk premium in Korea, preventing utilization of various types of reinsurance, whereas the International Association of Insurance Supervisors (IAIS), the National Association of Insurance Commissioners (NAIC), and the EU’s Solvency II allow various types of reinsurance as well as traditional reinsurance as long as risks covered are transferred in substance.

The event, co-hosted by Kim & Chang and the Korea Insurance Research Institute (“KIRI”), consisted of two sessions.  The first session included Mr. Baek’s speech, as well as a speech from Nardeep Sangha, Managing Director of Swiss Re Services Limited, titled, “Insurance Companies’ Capital Management Using Reinsurance: How European Insurers Coped with Solvency II.”  In the second session, Chang-Hee Choi, a researcher at KIRI, gave a speech titled, “Current Status of Big Data Usage and Improvement Strategies,“ and Bill Zhang, the CDAO of AIG Japan, gave a speech titled, “Insurance Company’s Big Data Usage for Insurance Business Innovation.”  

Over 260 stakeholders attended the symposium, including officers/employees of insurance companies, supervisory authorities, scholars and insurance brokers, who generally echoed the need for regulatory reform in the reinsurance and big data industries for the development of the insurance industry.

About Kim & Chang’s Insurance Practice:

Our Insurance Practice is comprised of approximately 40 professionals, including over 20 Korean attorneys specializing in insurance with knowledge and experience in advisory and litigation services for various insurance-related matters.