South Korea handed out a record number of exclusive licences for insurance products in 2017, reaching more than double the previous year’s tally.
The surge in exclusive licences, which function similar to patents for insurance products, was spurred by two factors: the adoption of the International Financial Reporting Standard 17 (IFRS17), and an amendment of insurance regulations two years ago.
These factors created a need for new and diverse insurance products, as well as an environment which made it easier for insurers to develop and market new insurance products,
Korea Bizwire reported.
The Korea Life Insurance Association (KILA) and General Insurance Association of Korea (GIAK) revealed that 33 exclusive licences were granted in 2017, compared to just 15 in 2016. Prior to 2016, less than 10 licences were issued each year.
A total of 39 applications were filed last year, also setting a record high.
Both the KLIA and GLIA have the authority to issue exclusive licences for their respective segments, and these licences reward innovative insurers by prohibiting competitors from selling the licenced products for a set period of time. In 2016, the maximum duration of exclusive licences was extended from six months to one year.
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