Only Option After Business Failure Is Insurance Companies?…20,000 More Agents Last Year (Comprehensive)

Increase in Insurance Planners Despite COVID Recession
Rising Applications from New Insurance Planners

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] "For those who have temporarily closed their stores due to COVID-19 or are experiencing business difficulties, both beginners and experienced individuals are welcome. We will provide 50,000 KRW in transportation expenses to those who attend the interview."

The insurance industry has been fiercely competing to recruit insurance planners since the beginning of the year. Behind the enthusiasm for recruiting planners, including rookie training and various support funds, lies the recession. Due to the prolonged economic downturn caused by the COVID-19 pandemic, many individual business owners who failed in their ventures or self-employed people who closed their businesses have massively switched careers to become insurance planners.

According to the insurance industry on the 17th, the number of planners registered with the Life Insurance Association increased from 109,436 in January last year to 112,397 in November, growing by about 3,000 over 10 months. This means that about 300 new planners registered every month.

The number of planners registered with the General Insurance Association reached 180,777 as of the end of the third quarter last year. It slightly increased from 175,032 in the first quarter to 176,493 in the second quarter, then surged by about 15,000 in the third quarter. The number of exclusive planners affiliated with general insurance companies also exceeded 100,000 for the first time in history as of the third quarter.

The qualification exams to become insurance planners have been ongoing since last May, after being temporarily suspended due to the escalation of social distancing measures. An official from the Insurance Association said, "Whenever social distancing levels rise, there is discussion about whether to continue the qualification exams, but the industry demands that the exams proceed," adding, "Considering the livelihoods of those preparing to become planners, it is not easy to halt the exams."

It is considered unusual that the number of insurance planners has significantly increased despite expectations that face-to-face sales would decline due to the COVID-19 situation.

The dominant analysis is that the needs of insurance companies seeking to recruit planners and job seekers looking to switch careers to become planners have aligned. Insurance companies must secure planners more aggressively during recessions because the influx of new planners leads to new contracts.

The number of self-employed individuals closing their businesses due to the COVID-19 impact is increasing. According to a 'Small Business Owner Business Status Survey' conducted by the Federation of Small Businesses targeting 1,000 general and closed small business owners nationwide (700 general small business owners + 300 closed small business owners), 7 out of 10 decided to close their businesses due to the COVID-19 pandemic.

In this atmosphere, insurance companies are revamping support measures for new planners or conducting large-scale recruitment activities. Hyundai Marine & Fire Insurance operates a commission system that provides settlement support funds, activity support funds, childcare support funds, congratulatory and condolence support funds, and incentives.

Prudential Life Insurance recently recruited the 14th class of SPAC, a sales expert training program, targeting graduates (or prospective graduates) of four-year universities. Orange Life also revamped its rookie settlement system, providing 1 million KRW to rookies in their first and second months regardless of performance, and during the period of working as a rookie, they will pay up to three times the support fund depending on the performance grade.

However, from July, employment insurance will become mandatory for special-type workers such as insurance planners, which is likely to increase the cost burden of securing planners. An industry official expressed concern, saying, "With the government setting the employment insurance rate at 1.4%, insurance companies also have to bear half of the insurance premium, which is a burden," adding, "We may have no choice but to separate sales organizations or restructure low performers."

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