By Yoon Ja-young
Staff Reporter
In one of the most rapidly aging countries in the world, it is never too early for Koreans to start preparing for retirement, executives of PCA Life Insurance said.
The leading British insurer in the country announced the launch of its fifth retirement campaign, Tuesday. It has implemented a series of retirement campaigns since 2005 to boost awareness of retirement preparation.
``For both individuals and government, it is wise to take action early. It's never too early to start saving,'' said Tom Boardman, director of retirement strategy and innovation at PCA's group in the United Kingdom. The British insurer operates PCA Life Insurance in Korea.
Boardman said Korea is experiencing an unprecedented rapid aging of society, citing Organization for Economic Cooperation and Development (OECD) statistics. The old age dependency rate, or the rate of those 65 years or older as a percentage of those between 20 and 64 years old, was 27 percent in the United Kingdom in 2000, while in Korea it was 11 percent. ``The United Kingdom has a much higher old age dependency rate now, as Korea has nine workers for every pensioner.''
The figure, however, is estimated to reach 67 percent for Korea in 2050, while that of the United Kingdom would be 47 percent.
He pointed out that there is quite limited immigration into Korea, while immigrants from Eastern Europe are boosting the working population of the United Kingdom.
``These demonstrate the need for change. States will just provide safety nets. Longevity risk has moved to the individual,'' Boardman said.
According to Boardman, many people in the United Kingdom invest in property as a retirement plan as do Koreans, but it involves risk ― housing prices are expected to drop.
The life insurer is scheduled to launch a new variable annuity product ``PCA Power Return Variable Annuity Insurance,'' which guarantees a total annuity income of between 120 and 200 percent of the insurance premiums paid, regardless of investment performance. The product maximized investment returns as premiums are invested not only before retirement but also after.
Kevin Wright, president & CEO of PCA Life Insurance, stressed that the insurer is a part of the global organization that has over 160 years' experience in financial services.
Regarding cross selling of insurance products, he said he sees it as a natural progression, as cross selling offers one stop service to customers.