"Insurance Sales King 'GA': Build or Acquire Directly"…New Survival Strategy of Life Insurance Companies

Shinhan Life Insurance GA Subsidiary Establishment 추진
Hanwha Life Insurance Reviews Acquisition of PeopleLife

[Asia Economy Reporter Oh Hyung-gil] Life insurance companies are recently eyeing corporate insurance agencies (GA) that have rapidly grown in size. This is interpreted as a move to boost sluggish performance amid industry downturns and strengthen sales organizations that form a key pillar of the insurance sector.

According to the insurance industry on the 3rd, Shinhan Life, which is set to merge with Orange Life next July, established a GA subsidiary called 'Shinhan Life Financial Services.' Additionally, three managers from Shinhan Life were appointed to build the organization.

This is seen as a measure to prevent the departure of sales organizations that may occur during the merger process with Orange Life and to expand synergy. Shinhan Life is well known for its strength in telemarketing (TM) channels and bancassurance channels. In particular, it has a high proportion of female insurance planners. On the other hand, Orange Life, which mainly operates face-to-face channels, tends to have more male insurance planners.

As a preliminary step before integrating two organizations with different sales cultures into one, the establishment of a subsidiary-type GA aims to minimize potential conflicts and facilitate a flexible merger.

The organizational structure of the GA subsidiary is expected to be centered on Shinhan Life planners wishing to move to the subsidiary, planners from other insurance companies, and planners affiliated with GAs. As of April, the number of exclusive planners was 6,042 for Shinhan Life and 5,130 for Orange Life.

Since early February, Shinhan Life has been forming a task force (TF) to establish the GA subsidiary. The establishment is progressing smoothly, with detailed schedules prepared through consultations with financial authorities.

Hanwha Life is also considering acquiring GA PeopleLife. PeopleLife, founded in 2003 by Chairman Hyun Hak-jin, a former Samsung Life executive, is ranked 10th in the industry. It currently operates 109 branches and plans to expand to 250 within the year.

Last year, PeopleLife's operating revenue was 242 billion KRW, a 25.5% increase from the previous year. However, it recorded a net loss of 32.8 billion KRW, continuing its capital erosion status. Hanwha Life, which already owns GA subsidiaries such as Hanwha Financial Asset and Hanwha Life Asset, is expected to strengthen its sales organization through the acquisition of PeopleLife.

With the recent separation of insurance product creation and sales, the growth potential of the GA business is estimated to be high. Last year, the commission income of medium to large GAs was 7.4 trillion KRW, a 20.8% increase from the previous year. Currently, seven life insurers operate GA subsidiaries, including Samsung Life, Hanwha, Prudential, LINA, Mirae Asset, MetLife, and ABL Life.

An industry insider said, "If planners leave for GAs, insurance companies' sales will inevitably suffer significant damage," adding, "This is likely a measure to prevent planner outflow and secure a certain level of sales capability through subsidiary GAs."

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