About the Author
View more articles by Dagyum Ji
Dagyum Ji is a senior NK News correspondent based in Seoul. She previously worked for Reuters TV.
North Korea’s externally-focused online outlet Naenara recently reported on a new English-language website for the country’s “first insurance and reinsurance broker” company.
The Pyongyang-based Rainbow Intermediaries was established in May 2015, and is reportedly authorized to work in three sectors: insurance and reinsurance brokerage and “professional” insurance consulting.
“Rainbow Intermediaries satisfies the demands of corporate and individual clients throughout the country for insurance cover of their life and property against risks in close cooperation with the national insurers,” the website read, promising the company “will always try to offer a service as reliable and diverse as it could to win the heart of the clients.”
With regard to insurance broking services, the company’s coverage includes “fire, motor, contractor’s all risk & erection all risk, and machinery breakdown insurances.”
“Life, travel, personal accident, and tourist insurances” are also offered, targeting individual customers.
The company also provided reinsurance brokerage services, including treaty and facultative reinsurance.
The insurance and reinsurance broker company notably said it has gone through “rapid growth in two consecutive years” earning an income of approximate KPW 12.5 million in 2015, the website said, continuing that the total income reached around KPW 37 million by the end of 2017.
The profits have also increased around nine times from KPW2.37 million to KPW 21.6 million in 2017, the income statement read.
In terms of “financial figures,” the company shared information on brokerage income per year, its proportion, balance sheet, income statement, and cash flow statement.
“In keeping with the development of global insurance industry, we will further update the efficiency of our service to help our clients choose the best of insurance products available in the market,” Managing Director Kim Myong Hak said.
Peter Ward, a writer and researcher on the North Korean economy and NK Pro contributing analyst, said the appearance of the broker suggests an increasing complexity and competition in the insurance sector.
“As an intermediary between domestic (and perhaps even foreign) insurance companies and customers, this represents a sign of growing complexity and sophistication in the provision of commercial services within the North Korean economy,” Ward told NK News.
“It also indicates that there may exist real competition between providers in the provision of such services, with intermediaries like this facilitating such competition, perhaps acting as a marketplace for insurance providers.”
The emergence of the insurance and reinsurance brokerage is notable considering the previous monopoly-like nature of the North Korean insurance industry.
The Korea National Insurance Corporation (KNIC), which was established in 1947, was previously the “country’s sole national insurance agency specializing in property insurance,” according to a South Korean Ministry of Unification (MOU) database.
The official website of the KNIC said it mainly provides life and non-life insurance services in the territory of the DPRK, explaining that around “10 provincial insurance branches and over 200 insurance branch offices at municipal, district, and country levels thereunder across the country.”
UN Security Council (UNSC) Resolution 2371 in August 2017 designated the KNIC, citing its links to Office 39 — a secretive branch of the North Korean ruling party involved in raising slush funds for the DPRK leadership.
Notably, in December 2018, DPRK external online outlet Naenara reported on the websites of three previously-established North Korean insurance and reinsurance companies, speaking to a broader diversification of the insurance industry.
Nonetheless, Rainbow Intermediaries appears to be the first insurance and reinsurance broker company introduced by Naenara.
Of the three, the Polestar Insurance Company, headquartered in Pyongyang, was established at in August 2016 with insurance and reinsurance services in the field of fire, engineering, credit, and agriculture.
The company was established to “meet the growing social awareness of insurance and widespread demand for reliant insurance guarantees among the people and companies in the environment in which the country’s economy has grown rapidly in recent years,” the Korean and English-language official website read.
It has 11 regional branches in areas including Pyongyang, Phyongsong, and Sinuiju, as well as 70 local agencies across the DPRK.
In October 2016, the Samhae Insurance Company was launched, with coverage in the marine hull, cargo, and liability, and aviation, an English and Korean-language website read.
The Future Re Company — which was established in October 2017 and only operates the English-language website — offers facultative and treaty reinsurance.
Martin Weiser, a researcher focused on North Korea, said the “expansion of the insurance sector in North Korea certainly begun before August 2016.”
This trend, Weiser said, “began shortly after the revision of the Insurance Law in April 2015.”
Weiser pointed to the Polestar Insurance Company as an example, whose brochure said it is “jointly owned by three companies: Ansan Construction United, Dangsang Electronics Company and Pongnam Cooperative Wholesalers.”
“This pooling of company or potentially even private capital into insurance companies might be new,” Weiser said. “It has been raised already as one factor behind the economic growth under Kim Jong Un in general, but the insurance sector seems to have been off limits until then.”
Edited by James Fretwell and Oliver Hotham
Featured Image: Screengrab of Rainbow Intermediaries’s website