On the 19th, a five-story building stood out in a residential area in Umyeon-dong, Seocho-gu, Seoul. Although it looks like an ordinary single-family home, it is ‘ KB Golden Life Care Seocho Village’, a senior care facility operated by KB Life Insurance . In addition to excellent accessibility to the city center, it was cleaner and more cozy than most hotels due to its ‘home-style’ design that opened the room to a common living room and the single and double occupancy rooms. 30% more employees than the legal standard provide 24-hour care for the elderly.
An official from this company explained, “In the case of Seocho, the 80-person capacity was full and 2,072 people were registered on the waiting list, but if you include Wirye Village, located in Wirye New Town, the waiting list reaches about 5,000 people.” The company plans to introduce additional elderly care facilities in three locations: Gangdong, Eunpyeong, and Gwanggyo in 2025.
Insurance companies suffering from low growth due to low birth rate and aging population are paying attention to the elderly care business as a new business. As sales of existing insurance products such as whole life insurance slow down and yields drop, a breakthrough is being sought in the nursing care business that can encompass retirement health management and care for retirees.
Among life insurance companies, KB Life Insurance is moving quickly. We are accelerating our business through ‘KB Golden Life Care’, a subsidiary specializing in the nursing business, and by 2025, there will be a total of 11 facilities in Seoul and the metropolitan area, including 5 elderly care facilities, 5 day and night care facilities, and 1 residential welfare facility (Silver Town ) . Senior care infrastructure will be established.
KB Life Insurance currently operates nursing facilities under names such as Seocho and Wirye Village. In the case of Wirye Village, the monthly fee is 2 to 3 million won and the capacity is 125 people, but there are about 2,900 people on the waiting list. An official from this company said, “We also plan to develop products and services linked to life insurance and nursing care business.”
Shinhan Life has completed reporting to the Financial Services Commission for licensing related to its nursing care business and is looking for a site for a senior care facility. Samsung Life Insurance, Samsung Fire & Marine Insurance, and NH Nonghyup Life Insurance are known to have listed the nursing business as a future business candidate and reviewed its business feasibility. In the insurance industry, there is a saying that “unless there are special issues such as sales, we are looking into the nursing care business regardless of whether it is a life insurance company or a non-life insurance company.”
The demand for nursing care services among the elderly is overwhelming. According to the Health Insurance Research Institute, the total number of long-term care service users is expected to increase from 931,000 this year to 1.227 million in 2027. In particular, the number of people using long-term care services through elderly care facilities is expected to increase from 211,000 to 278,000 during the same period.
Older people who have economic power and live independently are also emerging. In fact, the annual income of seniors aged 65 or older was 15.58 million won in 2020, more than double the 7 million won in 2008. In a recent report, the Insurance Research Institute said, “As the baby boomer generation enters their 80s and 90s, demand for nursing services is expected to increase rapidly,” and added, “We need to review the supply of nursing facilities and services that reflect the diverse needs of the elderly.”
Although the number of elderly care facilities is steadily increasing, some point out that about 75% of them are run by private businesses, so the business scale is small and service satisfaction is low.
Success stories from overseas are also a reason why domestic짱구카지노 insurance companies are paying attention to the nursing care business. Sompo Holdings, one of Japan’s top three insurance groups, entered the nursing care business in 2015 and made a profit within two years. Sompo Care, a nursing business subsidiary of Sompo Holdings, ranked second in the nursing care market and recorded sales of 149.8 billion yen (approximately 1.36 trillion won) as of March. The nursing business has fully established itself as one of Sompo Holdings’ five core businesses, along with life insurance, non-life insurance, overseas insurance, and digital business.
However, high initial costs are a concern for insurance companies. According to the current Enforcement Rules of the Senior Welfare Act, nursing facility operators must secure ownership by purchasing land and buildings directly. An insurance industry official said, “It is true that operating a nursing facility with a capacity of 100 people in a metropolitan area with good accessibility requires at least 50 billion won in initial costs, including land purchase, so it is a huge burden for companies.” For this reason, there is an opinion that if nursing facility buildings can be leased or consignment operation is allowed, as in Europe and Japan, quality nursing facilities can be rapidly expanded as insurance companies increase in advance.
Some are concerned that if related regulations are relaxed, elderly care facilities may become overcrowded and residents’ housing stability may decline. In response to this, the Life Insurance Association and the Non-life Insurance Association recently proposed an alternative through a research service to revitalize nursing services, limiting nursing service providers to ‘good companies’ by setting standards such as credit ratings. In addition, in terms of operation, it was suggested that the government needs to review supplements such as managing the total capacity of each region or restricting the renewal of business license when the quality of service falls below a certain level.
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