“Reshaping the insurance industry” was the main topic for this year’s International Insurance Society seminar held last week.

The sector is trying desperately to steer clear from the three major deadlocks it’s facing: a sagging global economy, an aging society and natural disasters.

“We did our best to pin down globally shared and applicable issues,” Moon Jae-woo, the co-head of organizing committee of the five-day international forum, told The Korea Herald.

The reward for such efforts came in positive reviews from non-organizer members from overseas, he said. Moon is concurrently the chairman and chief executive of the General Insurance Association of Korea.

The chairman stressed that low interest rates and low economic growth are haunting insurers.

“Insurance is naturally a long-term financial product, meaning that we need to manage our clients’ insurance money and make profits in a long period of time,” Moon noted. “But the current global economic slowdown most likely will last more than just one or two years. There are such examples in Japan.”

Another threat for global insurance industries is a rapidly aging society that demands longer insurance coverage and brings down the GDP.

“Things changed from the past when we enjoyed 7-10 percent growth in GDP and people could afford the insurance they needed, unlike now,” Moon said.

A 10-year rise in the average lifespan means that both the insurers and their clients are forced to consider how to increase their insurance coverage by that much.

Further, Moon pointed out the threat of natural disasters, such as Thailand’s floods, torrential rain in Australia and New Zealand and abnormal weather in the U.S., that have crushed many advanced and emerging economies.

In Korea, the Korean Reinsurance Co. incurred its largest loss from the Thai disaster, dashing its hopes for growth. In Japan, a number of Japanese reinsurance companies were wiped out in the aftermath of the Fukushima nuclear disaster.

“Insurers do all they can to predict natural disasters, but losses grow in proportion to mis-forecasts,” the chairman noted.

The 49th International Insurance Society seminar was held in Seoul for a second time following the first in 1987.

By Chung Joo-won (joowonc@heraldcorp.com)