Corporate Insurance Agency Commission Revenue Exceeds 7 Trillion Won... 20% Increase Year-on-Year

[Asia Economy Reporter Oh Hyung-gil] While insurance companies are experiencing a decline in performance, corporate insurance agencies (GA) specializing in insurance sales have seen a significant increase in commission income.

According to the provisional management performance of medium and large GAs announced by the Financial Supervisory Service on the 11th, the number of new contracts by GAs last year reached 14.61 million, a 14.3% increase compared to the previous year.

The commission income they received from insurance companies through insurance sales surged by 20.8% year-on-year to 7.4302 trillion KRW.

On the other hand, the net profit of insurance companies during the same period was 5.3367 trillion KRW, down 26.8% from the previous year due to deteriorating insurance business profits, marking the lowest level in 10 years.

With the emergence of large GAs that overshadow insurance companies, their influence in the insurance industry is expected to grow stronger.

As of the end of last year, there were 190 medium and large GAs, an increase of 12 from the previous year, and the number of affiliated planners rose by 8,649 to 180,395.

Among the 14.61 million new contracts through GAs, large GAs accounted for 12.21 million contracts, and medium-sized GAs accounted for 2.39 million contracts.

Non-life insurance products accounted for 13.07 million contracts, making up the majority of new contracts, while life insurance products accounted for only 1.54 million contracts.

The incomplete sales ratio, which indicates the soundness of insurance contracts, improved by 0.05 percentage points from the previous year to 0.08%, whereas the contract retention rates were 80.42% at the 13th installment and 61.53% at the 25th installment, down 0.76 percentage points and 2.01 percentage points respectively compared to the previous year.

A Financial Supervisory Service official explained, "While large GAs continue to grow externally in terms of new contract numbers and commission income, the incomplete sales ratio has somewhat improved. However, since the 25th installment retention rate is below the channel-wide average, it is difficult to say that unfair business practices have eased."

The Financial Supervisory Service plans to strengthen continuous monitoring of fabricated contracts or special benefit provisions aimed at expanding GA commission income, and will take strict action through on-site inspections for companies where abnormal signs are detected.

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