Life insurers push to advance into death care industry
Life insurance companies are pushing to tap into the death care industry that has been growing in Korea’s rapidly aging society.
Death care refers to the planning, provision and improvement of postdeath services, products, policies and governance.
This business strategy is in line with the death cross, a term referring to a decline in population caused by a higher number of deaths than births.
A death cross was first reported in Korea in 2020, when the number of deaths totaled 308,000 against that of births at 276,000, according to Statistics Korea.
The gap between the numbers of deaths and births has since widened, including in 2023, when a total of 352,700 people died compared to 230,000 newly born babies.
“Under the circumstances, the death care industry is increasingly drawing attention as people are spending more money bidding farewell to loved ones,” said a public
relations staffer at the Korea Life Insurance Association, a lobby group of life insurers nationwide.
“We reckon that the death care industry can be extended from life insurers’ conventional business of offering products where the benefits accrue to designated beneficiaries upon the policyholder’s death.”
The insurers are interested in offering a package of services in funerals, cremation, burial and memorials.
Of these companies, Mirae Asset Life won approval from the Financial Supervisory Service in October 2023 to partner up with a mid-sized funeral home to promote funeral-related services for its subscribers.
The services range from organizing a funeral ceremony and securing a burial site. They are available at a discounted price for Mirae Asset Life customers.
An affiliate of NongHyup Financial Group, NongHyup Life Insurance,
signed a contract with the group’s funeral service arm, NongHyup Partners, in August 2023.
Under the contract, the insurer sells services offered by NongHyup Partners to its subscribers at a discounted price.
KB Life Insurance is seeking approval from the financial regulators to merge its subsidiary KB Golden Life Care, which is specialized in elderly care, under a broader plan to set foot in the death care industry.
Industry sources deemed breaking down regulatory barriers separating finance and commerce is essential for life insurers to directly advance into the death care industry, instead of forming a partnership with funeral homes.
The sources noted that life insurance is classified in the finance sector, whereas death care is categorized in the commerce sector.
The separation of the two sectors has been practiced for decades, mainly to prevent conglomerates, which center on manufacturing industries, from owning banks for illicit financial activities.