SEOUL – As South Korea rapidly transforms into a super-aged society, financial holding companies are aggressively moving into the burgeoning nursing care industry, recognizing its immense potential as a future growth engine. With the market projected to surge from 72 trillion won ($49.61 billion) in 2020 to a staggering 168 trillion won by 2030, these firms are positioning themselves to capitalize on the increasing demand for senior care services.
The catalyst for this shift is Korea's rapidly aging demographics. Currently, over 20 percent of the population is aged 65 or older, a figure expected to nearly double to 47.7 percent by 2072. This demographic shift has created a lucrative market for nursing care, driven by the increased need for medical attention and related health services among older individuals. The industry has already witnessed impressive growth, averaging 15.6 percent annually between 2018 and 2022.
Hana Financial Group has taken a pioneering role, launching its "HANA THE NEXT" brand in 2024. This initiative offers comprehensive life-care services for older adults, encompassing everything from retirement planning and inheritance management to health services. Hana has also introduced specialized financial products, including target-date funds and dementia care insurance, to cater specifically to the needs of retirees.
Other major players are following suit. KB Financial Group, through its insurance affiliate, KB Life Insurance, operates three “silver towns,” providing upscale retirement communities with a range of amenities and services. Shinhan Financial Group's insurance arm, Shinhan Life, has opened a nursing home and plans to expand its senior care housing offerings. Even NongHyup Financial Group has established a dedicated nursing care business team.
These financial giants are leveraging their expertise in finance and insurance to offer a holistic approach to senior care, combining financial planning with housing, healthcare, and other essential services. However, industry experts are calling for regulatory changes to further stimulate growth in the sector. One anonymous official suggested that easing restrictions on financial firms' entry into related commercial sectors would allow for more comprehensive and innovative service offerings.
The move by financial holding companies into the nursing care industry signals a significant shift in the Korean business landscape. As the population continues to age, these companies are poised to play a crucial role in providing essential services and supporting the well-being of older adults, while also tapping into a rapidly expanding market.
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