No 'COVID-19 Windfall' for Insurers' Q1 Non-Face-to-Face Sales Channels

[Asia Economy Reporter Oh Hyung-gil] Concerns that face-to-face sales by insurance planners would significantly shrink in the first quarter of this year due to the COVID-19 pandemic turned out to be 'unfounded.' Predictions that non-face-to-face channel sales using online methods would benefit from the COVID-19 situation were also off the mark.

Looking at the first quarter new contract annualized premium equivalent (APE) status by sales channel disclosed by insurance companies on the 18th, the insurance industry's forecast that face-to-face sales would shrink and non-face-to-face channels would rapidly grow appeared different from reality. APE is an indicator that converts monthly or other premium payments into an annual basis, representing the growth potential of insurance company sales.

Samsung Life Insurance's first quarter new contract APE was 692 billion KRW, a 2.3% increase compared to the same period last year. Among this, the exclusive planner performance was 405 billion KRW, showing little difference (0.9%) compared to the previous year. During the same period, the corporate agency (GA) performance was 169 billion KRW, up 4.3% year-on-year. The combined APE share of these two planner channels was 82.9%, only slightly down from 84.4% in the same period last year.

On the other hand, other channels including telemarketing (TM) and cyber marketing (CM) recorded 9 billion KRW, a decrease of about 43.7% from 16 billion KRW in the same period last year.

In particular, bancassurance sales at bank counters recorded 109 billion KRW, a 22.4% increase compared to the same period last year. Bancassurance sales played a relatively more significant role than non-face-to-face sales.

Hanwha Life Insurance's new contract APE also increased by 4.4%, from 537 billion KRW in the first quarter last year to 560 billion KRW in the same period this year. Among this, the share of financial planners (FP) and GA was 62%, down 8 percentage points from the previous year, while the bancassurance share rose 8 percentage points from 27% last year to 35% this year. The share of other channels such as online remained unchanged at 3% compared to the same period last year.

Non-life insurance companies also showed that non-face-to-face channel performance did not significantly increase in long-term insurance, excluding automobile insurance where direct channels traditionally dominate.

Samsung Fire & Marine Insurance's first quarter long-term personal insurance planner channel (exclusive + GA) APE was 14.4 billion KRW, accounting for nearly 94.7% of the total. This was slightly down from 96.3% in the same period last year. Meanwhile, internet and bancassurance performance only slightly increased from 0.5 billion KRW in the first quarter last year to 0.8 billion KRW this year.

Hyundai Marine & Fire Insurance's long-term insurance new contract APE share by sales channel showed exclusive planners at 44.3%, GA planners at 47.9%, while others (TM+CM) accounted for only 4.3%. DB Insurance also had exclusive planner APE share at 52.3%, GA at 45.5%, but others (TM+CM) were only 2.2%.

However, in the case of automobile insurance, online-based direct channel performance showed growth. Samsung Fire & Marine Insurance's direct sales share rose 4.1 percentage points year-on-year to 47.4%, while face-to-face share decreased from 56.7% to 52.6%. DB Insurance's non-face-to-face (TM+CM) channel sales share increased by 4.6 percentage points year-on-year to 44.8%.

An official from the non-life insurance industry said, "Except for automobile insurance where online price comparison has become established, non-face-to-face channel sales did not show growth," but added, "From the second quarter onward, the impact of face-to-face sales contraction due to the COVID-19 situation will become more apparent."

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