Despite COVID-19, New Insurance Contracts Increase... Overcoming the '3rd Wave' Digitally

Swift Digital Transformation... Blocking Sales Decline
Agent Exams, Once Suspended, Also Proceeding as Scheduled

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] "A crisis that is already known is not a crisis."

In response to the third wave of the novel coronavirus infection (COVID-19), the insurance industry has swiftly embraced digital transformation to prevent a decline in sales.

This is due to the difficulty of face-to-face sales caused by strengthened social distancing measures, as well as the fact that nearly half of the employees have shifted to remote work, making normal operations impossible. By extensively revising sales strategies to strengthen non-face-to-face methods, insurance companies expect that there will be no sales suspension incidents like those earlier this year.

According to the insurance industry on the 8th, the monthly new contract volume of life insurance companies recorded 28.68 trillion KRW and 54.92 trillion KRW in January and February, respectively, when COVID-19 first broke out and the first confirmed case was reported in Korea. Due to the spread of COVID-19, these figures decreased by 9.8% and 2.6% compared to the same months last year.

The recovery was rapid. In April, when the monthly number of COVID-19 confirmed cases dropped sharply below 1,000, the new contract amount increased by 0.8% year-on-year to 111.3 trillion KRW, marking a growth trend. In September, the new contract volume was 229 trillion KRW, maintaining a 3.9% increase compared to the same month last year.

The gross written premiums of non-life insurance companies also rose to 22.11 trillion KRW in the first quarter and 44.44 trillion KRW in the second quarter, up 7.4% and 6.9% respectively from the same periods last year. The third quarter recorded 66.64 trillion KRW, a 6.7% increase year-on-year. Considering that mandatory automobile insurance premiums were raised this year, the significant increase in gross written premiums is interpreted as the impact of COVID-19 being largely mitigated.

The insurance industry is currently issuing thorough countermeasures to prevent damage to sales amid the third wave of COVID-19. Instead of imposing restrictions on excessive sales activities, they are actively encouraging the transition of customer interactions and contract documentation to non-face-to-face methods.

Samsung Life Insurance has digitized all areas from sales to contract review and customer management. Using tablet PCs for insurance consulting, they conduct everything from product consultation to contract signing in a one-stop process on the tablet PC. Hanwha Life Insurance also launched last month a digital sales channel called 'LifeMD,' based on a mobile application (app), enabling non-face-to-face processes from agent registration to subscription.

Kyobo Life Insurance established a personal brand system for financial planners (FPs). To enhance FPs' sense of belonging and professional image in the field, they produced kits applying brand designs such as sales forms and distributed them free of charge to all FPs, fostering differentiated competitiveness.

The insurance agency (GA) sector, which is active in sales, has been actively recruiting agents who conduct insurance sales through non-face-to-face channels such as blogs and social networking services (SNS). Given the lower costs and the possibility of remote work, there is a growing trend to actively encourage online sales.

The agent qualification exam, which had been suspended for about two months since the end of February, is scheduled to proceed as planned from the 11th. The Life and Non-life Insurance Associations plan to limit the number of examinees to 50 per session.

An industry insider said, "Through the experience of declining performance earlier this year due to COVID-19, we have thoroughly prepared countermeasures," adding, "While expanding the scope of non-face-to-face channels, we are also preparing to integrate IT technology into agents and face-to-face channels to enable normal operation."

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