South Korea: Interest rate hikes to disrupt insurance mart
Source: Asia Insurance Review | Dec 2017
South Korea’s insurance industry will face “disruptive change” if the nation’s central bank raises interest rates, a senior official at the financial regulator has said.
The Bank of Korea is expected to raise its key rate in coming months, marking its first tightening in more than six years, reported Yonhap News Agency.
Dr Kim Yong-beom, Vice Chairman of the Financial Services Commission, told an insurance forum: “You see in Korea, the biggest disruptive change to our insurance industry emerged when the ‘normal’ interest rate environment was redefined.”
He did not specify what the change was or how a rate hike would affect the insurance industry.
With household debt considered high, one outcome of higher interest rates could be less money for savings and insurance. A