Major Life and Non-Life Insurers Performed Well Despite 'COVID-19' Challenges (Comprehensive)

'Hit to Face-to-Face Sales' Concerns of 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 disease (COVID-19), the premium income of major life and non-life insurance companies in the first half of the year significantly increased 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 swiftly adapted to the COVID era, such as increasing 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 top 5 life insurers and top 5 non-life insurers, their premium income in the first half of the year recorded 65.2522 trillion KRW, a 6.0% increase from 61.5524 trillion KRW in the same period last year.

The premium income of the top 5 life insurers was 31.393 trillion KRW, up 4.5% year-on-year.

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

Among these, protection-type 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 grew 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.

Industry leader Samsung Life 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 assumptions on asset yield were lowered due to falling market interest rates, resulting in a decline in new contract value." It added, "New contract margins also dropped 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'... Top 5 Non-Life Insurers' Premium Income Up

For the top 5 non-life insurers, premium income increased steadily. Their premium income 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 rose 4.2% year-on-year to 9.9332 trillion KRW, while 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 surged 15.7% to 4.4894 trillion KRW.

Non-life insurers showed balanced growth in their main insurance product sales. For Hyundai Marine & Fire Insurance, general insurance premium income increased by 15.6% to 66 billion KRW, long-term insurance by 4.0% to 4.4472 trillion KRW, and automobile insurance by 15.4% to 1.982 trillion KRW.

Initially, the insurance industry widely expected that the COVID-19 outbreak would severely impact sales.

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

An industry insider said, "Some insurers overcame the decline in 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 as well, so focus should be placed on managing existing contracts."

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