A surprising development in the global insurance industry: North Korea has established its first investment insurance firm. The firm’s aim is to attract foreign investments to the troubled country. It is expected that the North Korean firm will purchase reinsurance policies from international companies and offer this coverage to companies looking to do business within its borders. The firm is being built to mimic an insurance system in South Korea, which has served as a way to help business owners recover from financial losses due to risky investments.
Because of North Korea’s troubled political structure and turbulent history with human rights, foreign companies have avoided doing business in the country for decades. To date, Chinese companies are among the few to take root within North Korea, partly due to the close relationship the two countries share. Despite the problematic atmosphere surrounding the county, the North Korean government believes that the new insurance firm will help bring economic opportunities to the country.
Though the move is something of a surprise to the insurance industry, it does show that the country is beginning to open up to the foreign market after decades of isolation. Since the passing of Kim Jong-Il, the former leader of North Korea, his son, Kim Jong-Un, has avoided much of the limelight that is often directed at his new position. Amidst concerns that the son would follow in the footsteps of the father, the international community has shown a degree of skepticism. Fortunately, Kim Jong-Un seems to be taking a different approach than his father had, as is evidenced by North Korea’s first international insurance firm.