Hello our readers.
This year is heading towards the end, letting us think back of the past few months that we have gone through. All of you would have experienced your personal events, whether good or bad. How would you describe this year? If you were to pick ‘this year’s word’, what is going to be yours?
The Oxford University chose ‘omnishambles’ as word of the year. The word is defined as ‘a situation that has been comprehensively mismanaged, characterized by a string of blunders and miscalculations.’ This pick by the Oxford reflects financial turmoil in Europe and overall economic depressions world-wide. It seems that the word ‘omnishambles’ is properly addressing the year 2012.
Right, the global economy is being challenged by a series of crises and difficulties. Korea, amid this global crisis, is also confronting an economic issue. That is, low economic growth along with low-interest rate. There are also some structural problems such as aging society, absence of a new growth engine, and high reliance on international trade. Although Korea’s sovereign credit rating was recently upgraded, there still remain challenging issues to keep up with international trade and finance.
Financial system needs changes to effectively deal with uncertainty and instability in the midst of global downturns. Particularly, insurance industry is exposed to a vulnerable position, compared to other financial industries. This is because insurance products are sensitive to the rate of economic growth and interest. Also, our rapidly aging society demands more insurance products. “To respond to the changes in the current era and to be advanced as a leading and reliable financial industry, insurance companies should make great efforts to protect their consumers and to develop appropriate products and services”, said Mr. Kim Seok-Dong, the FSC’s Chairman, at the workshop ‘Insurance Industry at Times of Low-interest Rate’ held on 5th of December.
For insurance industry to build a cornerstone for further improvement and advancement, the FSC will continue to enhance protection measures for financial consumers. Low economic growth at time of low-interest rate is not an easy task to be resolved. Rather, a systemic analysis and prompt response are in need. FSC in cooperation with financial companies will address this need, which will contribute to easing the current financial difficulties.