[Reporter’s Notebook] Countless 'Runaway' Insurance Agents... Nationwide Employment Insurance Out of Touch with Reality

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Securing exclusive agents, known as the "flower of insurance sales," is the top priority for insurance companies. Although 'untact (contactless)' sales have gained attention since the COVID-19 pandemic, agents remain the core pillar of insurance sales.

Recently, the insurance industry has been unsettled by a bill that could shake up the agent organization. This is the partial amendment to the Employment Insurance Act, so-called the 'National Employment Insurance System,' which was introduced by Representative Han Jeong-ae of the Democratic Party of Korea on the 9th.

The amendment aims to apply employment insurance to special-type workers who are unemployed to stabilize their livelihood and enable early reemployment. It seeks to include platform workers, freelancers, and special employment types, who were excluded from the scope of the 'Partial Amendment to the Employment Insurance Act' passed in the 20th National Assembly, as mandatory subscribers to employment insurance.

Considering the reality that special employment workers have been pushed to the brink of unemployment since the COVID-19 crisis, the intention to establish an employment safety net is quite understandable. If the amendment passes, insurance agents will also have access to employment insurance benefits.

However, despite being a law that deserves applause, it is receiving criticism for being a policy disconnected from reality. This is because it does not properly reflect the working conditions of agents, who are 'individual business owners' contracted with insurance companies.

Last year, the 13th-month retention rate of agents affiliated with life insurance companies was only 38%. The retention rate for non-life insurance agents was also just 53%. Even though insurance companies try to hold on to agents, 6 out of 10 new agents voluntarily change jobs or resign within a year.

The current employment insurance system restricts eligibility for unemployment benefits if a worker voluntarily leaves their job. In other words, most agents who change companies on their own may not be covered by employment insurance.

There are various reasons why agents change or quit their jobs. They may move to a large General Agency (GA) offering higher commissions and better sales environments, or they may be dissatisfied with their current workplace. Many agents also leave because sales work does not suit their temperament and they seek other careers.

"It is doubtful that agents who change jobs for a few hundred thousand won in commissions will stay with the company, pay insurance premiums themselves, and enroll in employment insurance. There is concern that the introduction of employment insurance might actually reduce jobs in the insurance industry," said an industry insider, expressing a heavy concern.

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