KDB Life Insurance Struggles to Shake Off 'Complaint King' Title... Consumer Complaints Surge

KDB Life Headquarters Building View

[Asia Economy Reporter Oh Hyung-gil] KDB Life Insurance is expected to retain the dishonorable titles of 'Complaint King' and 'Incomplete Sales King' this year as well. This is due to a surge in complaints from policyholders in the first quarter of this year, following last year.

Although the company managed to achieve a turnaround to profitability after four years and successfully normalized its management, there are concerns that aggressive sales strategies have led to a sharp increase in complaints related to incomplete sales.

According to the Life Insurance Association on the 6th, KDB Life Insurance recorded 1,308 complaints in the first quarter of this year, a 61.0% increase from 812 complaints in the previous quarter. This is the second highest number among all life insurers, following Samsung Life Insurance (1,557 complaints).

In particular, the number of complaints per 100,000 policies held rose by 59.6% from the previous quarter to 56.79 cases. This is the highest figure among life insurers. During the same period, the average for all life insurers was 10.15 cases, making KDB Life's figure about five times higher. Since complaint statistics began being disclosed in 2015, KDB Life is the only insurer to have exceeded 50 complaints per 100,000 policies.

Compared to the 'Big 3' life insurers with larger policy holdings?Samsung Life Insurance (9.14 cases), Hanwha Life Insurance (7.97 cases), and Kyobo Life Insurance (10.72 cases)?KDB Life shows a significant difference. It also has about 35 times more complaints than Hana Life Insurance, which has the fewest complaints at 1.62 cases per 100,000 policies.

Of the 1,308 complaints filed against KDB Life Insurance, 1,221 were related to sales. Other complaints included 11 related to insurance claim payments, 8 related to policy maintenance, and 68 categorized as others. Sales-related complaints increased by 62.5% compared to the previous quarter, claims by 175.0%, and maintenance by 100.0%.

KDB Life was also named 'Complaint King' last year. The number of complaints per 100,000 policies held in the first and second quarters of last year were 17.7 and 17.41 respectively, showing little change. However, the figure rose to 22.6 in the third quarter and further increased to 35.58 in the fourth quarter, indicating no improvement but rather an increase.

The market views the rapid surge in consumer complaints against KDB Life as a result of a large volume of incomplete or excessive sales conducted within a short period. As KDB Industrial Bank's efforts to find a new owner for KDB Life Insurance repeatedly failed, the sales drive pushed to improve poor performance is interpreted as leading to the increase in complaints.

Since appointing President Jeong Jae-wook in 2018, KDB Life Insurance has been pursuing management normalization through restructuring measures such as voluntary retirement and branch consolidation. As a result, the company achieved a net profit of 34.5 billion KRW last year, marking a turnaround to profitability after four years since 2016. Following the improvement in performance, the sale process has also gained momentum.

Last month, KDB Industrial Bank completed due diligence with private equity funds (PEFs) such as JC Partners for the sale of KDB Life Insurance and plans to select a preferred bidder as early as this month. JC Partners is reportedly planning to purchase a 92.73% stake in KDB Life Insurance for about 200 billion KRW and then proceed with a capital increase worth approximately 300 billion KRW.

An industry insider commented, "The high number of complaints in the first quarter indicates significant consumer dissatisfaction with products sold last year. While this may not have an immediate impact on the sale, it reflects the side effects of aggressive sales efforts made to improve performance."

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