'Market Share 10%' Meritz Fire & Marine Insurance Closely Chasing Top 4 Non-Life Insurers

Insurance Industry Faces Major Shift
'Janggi Inboheom' Strategy Proves Effective

[Asia Economy Reporter Oh Hyung-gil] 'Can Kim Yong-beom's Meritz Fire & Marine Insurance surpass the big four in the non-life insurance industry?'

In the non-life insurance industry, which is experiencing sluggish business conditions, Meritz Fire & Marine Insurance, which has been continuing its 'solo growth,' surpassed a market share of 10% last year. A 10% market share has been considered a 'magical barrier' for Meritz Fire & Marine Insurance. Accordingly, there are forecasts that a major shake-up in the rankings of non-life insurers originating from Meritz could be possible. However, some voices raise doubts about sustainable growth due to a focus on performance and excessive commission policies.

According to the non-life insurance industry on the 24th, Meritz Fire & Marine Insurance recorded a gross written premium of 8.0323 trillion won last year based on preliminary closing. This is a 13.4% increase from 7.08 trillion won the previous year. Based on the total gross written premiums of 13 non-life insurers, it achieved a market share of 10.1%.

This is the first time since 1998, when market shares could be checked through electronic disclosure, that Meritz Fire & Marine Insurance's market share exceeded 10%. Meritz Fire & Marine Insurance traces its roots back to 'Joseon Fire & Marine Insurance,' the first insurance company established in 1922, but since becoming Meritz Fire & Marine Insurance in 2005, its market share had remained in the 8% range until recently.

Meritz Fire & Marine Insurance's growth has been outstanding over the past five years. Its market share was 7.9% in 2015, increased to 8.1% in 2016, 8.5% in 2017, and reached 9.2% in 2018. The increase in market share steadily rose from 0.2 percentage points to 0.4, 0.7, and 0.9 percentage points.

It is also closely chasing the big four non-life insurers. Samsung Fire & Marine Insurance holds a dominant position with a 23.7% market share last year. Following are Hyundai Marine & Fire Insurance with 16.8%, DB Insurance with 16.3%, and KB Insurance estimated at 12.9%. Although there is still a gap of over 2% with KB Insurance, some forecasts suggest that Meritz could surpass it soon if the current growth pace continues.

The increase in market share of Meritz Fire & Marine Insurance, which had been the 'perennial fifth place,' is analyzed to be based on product strategies focused on long-term insurance and sales reinforcement strategies through securing agents after Vice Chairman Kim Yong-beom's appointment.

Meritz Fire & Marine Insurance's gross written premium for long-term insurance last year was 6.8671 trillion won, a sharp increase of 18.4% compared to the previous year, while the gross written premium for automobile insurance decreased by 16.6% to 651.3 billion won. This is evaluated as a successful shift from automobile insurance, where loss ratios are soaring, to life insurance. Additionally, it secured exclusive agents, establishing a solid sales channel. As of October last year, Meritz Fire & Marine Insurance had 23,278 exclusive agents, an increase of about 7,000 from 16,360 at the end of the previous year.

Some in the industry criticize Meritz Fire & Marine Insurance for disrupting market order with excessive commission setting and warn that sustainable growth may be difficult due to the sale of high-quality bonds. The Financial Supervisory Service pointed out during Meritz Fire & Marine Insurance's comprehensive inspection last year that business expenses and long-term insurance sales are rapidly increasing simultaneously and urged the company to establish a management department and control measures to regulate business expense execution.

An industry insider said, "It is quite significant that Meritz Fire & Marine Insurance has brought change to the non-life insurance industry, which has been entrenched for decades," but added, "It is now Meritz Fire & Marine Insurance's responsibility to dispel doubts about its growth in the market."

This content was produced with the assistance of AI translation services.