Large Life and Non-Life Insurers Performed Well Despite COVID-19

'Hit to Face-to-Face Sales' Concerns Over Negative Growth vs. Opposite
Long-Term Life Insurance, Non-Face-to-Face Sales, Bancassurance 'Secrets'

[Asia Economy Reporter Oh Hyung-gil] Despite the impact of the novel coronavirus infection (COVID-19), the premium income of major life and non-life insurance companies in the first half of the year increased significantly compared to the same period last year. This result is the exact opposite of concerns that face-to-face sales would shrink and lead to negative growth due to COVID-19.

It is interpreted that strategies quickly adapted to the COVID-19 era, such as increasing the sales of long-term insurance or expanding non-face-to-face sales, were effective.

According to the semi-annual reports disclosed on the 18th by the five major life insurers and five major non-life insurers, the premium income they earned in the first half of the year recorded 65.2522 trillion KRW. This is a 6.0% increase compared to 61.5524 trillion KRW in the same period last year.

The premium income of the five major life insurers was 31.393 trillion KRW, up 4.5% compared to the same period last year.

However, the results varied by company. The best performer was Hanwha Life. Hanwha Life’s premium income reached 7.1378 trillion KRW, growing by a remarkable 14.5% compared to the same period last year. The general account premium income increased by 6.8% year-on-year to 5.046 trillion KRW.

Among these, protection-type insurance premiums accounted for 2.97 trillion KRW, making up 59%. The corporate insurance market, including retirement pensions, also expanded, and non-face-to-face sales through online channels and bancassurance product sales increased.

Kyobo Life (6.2097 trillion KRW) and Tongyang Life (2.518 trillion KRW) also increased by 9.3% and 9.5%, respectively. It is interpreted that premium income increased as they expanded sales of long-term insurance instead of whole life insurance, which is a core product of life insurers.

Samsung Life, the industry leader, showed a slowdown. Samsung Life’s premium income in the first half was 12.1818 trillion KRW, down 1.2% from 12.3339 trillion KRW in the same period last year. NongHyup Life also decreased by 4.2%, from 3.4943 trillion KRW to 3.3457 trillion KRW.

Samsung Life explained, "Due to the impact of COVID-19, new contract volumes decreased, the proportion of health products shrank, and the assumption for asset yield was lowered due to a decline in market interest rates, resulting in a decrease in new contract value." They added, "New contract margins also fell to about 49% for the same reasons but improved in the second quarter compared to 45% in the first quarter."

Samsung and NongHyup Life 'Slowdown'... Premium Income of 5 Major Non-Life Insurers Up

In the case of the five major non-life insurers, premium income increased evenly. The premium income of the five non-life insurers in the first half was 33.8592 trillion KRW, up 7.4% from 31.5146 trillion KRW in the same period last year.

During this period, Samsung Fire & Marine Insurance’s premium income was 9.9332 trillion KRW, up 4.2% from the same period last year. Hyundai Marine & Fire Insurance (7.1267 trillion KRW) and DB Insurance (6.8429 trillion KRW) grew by 7.5% and 7.9%, respectively. KB Insurance recorded 5.467 trillion KRW, up 6.3% from last year, and Meritz Fire & Marine Insurance achieved a sharp increase of 15.7% to 4.4894 trillion KRW.

Initially, the insurance industry widely expected that the COVID-19 crisis would severely impact business operations.

The Korea Insurance Research Institute even predicted that life insurance premium income this year would decrease by 1.8% compared to the previous year due to a slowdown in the growth of protection-type insurance and a continued decline in savings-type insurance.

An industry official said, "Some insurers overcame the contraction of face-to-face sales by significantly securing exclusive agents," but added, "As a second wave of COVID-19 is expected, difficulties in sales are anticipated in the second half of the year as well, so focus should be placed on managing existing contracts."

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