The insurance industry is set to introduce a free 'mutual growth' insurance product for local small business owners and vulnerable groups across six regional governments --Gyeongnam, Gyeongbuk, Gwangju, Jeonnam, Jeju and Chungbuk -- by the third quarter of this year.
The initiative forms part of a broader commitment by the industry to support inclusive finance worth KRW2tn ($1.36bn) over the next five years.
According to the Financial Services Commission (FSC), the programme will be implemented in collaboration with the Korea Life Insurance Association and the Korea Non-life Insurance Association.
The FSC said business agreements have been signed with the six local governments, which were selected through a public competition, to expand insurance protection and financial support for small business owners and vulnerable groups.
Each participating local government will provide mutual growth insurance worth KRW2bn in total, comprising one life insurance product (KRW1bn) and one non-life insurance product (KRW1bn). Of this amount, KRW1.8bn will be funded by the industry’s mutual growth fund, while the remaining KRW200m will be contributed by the respective local government.
According to local news reports, FSC Chairman Lee Won-geon said, “The mutual growth insurance project will hold great significance in terms of reducing the coverage gap for vulnerable groups. As insurance demand is identified through voluntary public bidding by local governments, the insurance most suitable for the needs and conditions of local small business owners is planned to be prepared."