"Insurance Enrollment Still 'In-Person'... Life Insurers' In-Person Channels Up 32% Despite COVID-19"

Last Year, First Premiums in Life Insurers' Face-to-Face Channels Increased by 32.1%
Meanwhile, TM Channels Decreased by 28.9%

[Asia Economy Reporter Ki Ha-young] Despite the impact of COVID-19 last year, life insurance companies saw an activation of sales through face-to-face channels. This is analyzed to be because, given the nature of life insurers whose main products are individual insurance with complex product structures such as whole life insurance, the proportion of face-to-face subscriptions through agents inevitably remains high.

According to the Life Insurance Association on the 13th, the first-year premiums from face-to-face recruitment by 24 life insurance companies last year amounted to 7.5878 trillion KRW, a 32.1% increase from the previous year (5.7419 trillion KRW). On the other hand, the telemarketing (TM) channel recorded 72.6 billion KRW, down 28.9% from the previous year. The first-year premiums collected through the cyber marketing (CM) channel increased by 50% to 25.2 billion KRW compared to the previous year, but still accounted for the lowest share of first-year premiums.

Although it was expected that the proportion of face-to-face recruitment would shrink due to the COVID-19 impact last year, life insurers still maintained strong influence through face-to-face channels. Due to the complex product structures of life insurance, face-to-face sales are inevitable. Since there are many long-term contract products such as whole life insurance, many customers prefer to meet directly to understand the products before subscribing. In fact, the number of agents for face-to-face sales also increased. The number of exclusive agents last year was 94,620, an increase of 2,693 (2.9%) from the previous year (91,927).

The proportion of face-to-face channels in life insurers' sales is overwhelming. In last year’s first-year premiums of life insurers, face-to-face channels accounted for 98.6%, while TM and CM channels accounted for only 1.1% and 0.3%, respectively.

Additionally, last year, banks increased life insurance sales amid the Optimus and Lime private fund redemption suspension incidents, leading to a significant rise in face-to-face sales performance through bank counters. In the case of the TM channel, performance declined as small and large group infections continued in call centers from the early stages of COVID-19. The working hours of TM sales workers themselves decreased, which impacted sales activities.

This trend has continued into January this year. The first-year premiums from life insurers’ face-to-face channels amounted to 454.656 billion KRW, a 10.9% increase from the previous year. TM channel premiums decreased by 34.1% to 4.463 billion KRW, while CM channel premiums increased by 85.4% to 2.39 billion KRW.

An industry insider said, "Unlike automobile insurance, where online subscriptions are active, life insurance products have complex structures and long contract periods, making online sales difficult," adding, "Despite the impact of COVID-19, face-to-face sales will remain active."

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