Large GA, Average Commission per Non-Life Insurance Product 220,000 KRW... "The Larger the Scale, the Higher the Commission"
Need to Revise Agency Commission System and Recovery Regulations
[Asia Economy Reporter Ki Ha-young] It has been revealed that large corporate insurance agencies (GA) receive an average commission of around 220,000 to 230,000 KRW per non-life insurance contract from insurance companies.
According to the Insurance Research Institute's report titled "Expansion and Challenges of the GA Channel" on the 20th, last year, seven large GAs with more than 5,000 affiliated planners received an average commission of 224,000 KRW per non-life insurance sale, varying by insurance type.
The non-life insurance commission reported by seven large GAs with 3,000 to less than 5,000 affiliated planners was also 231,000 KRW on average per contract, showing little difference compared to GAs with over 5,000 planners. The commission per contract for GAs with 1,000 to less than 3,000 planners and those with 500 to less than 1,000 planners decreased to 172,000 KRW and 178,000 KRW, respectively.
GAs pay a portion of the commission received from insurance companies to their affiliated planners as performance-based allowances. Researcher Kim Dong-gyeom analyzed, "It is observed that larger GAs tend to receive higher commissions for the same sales volume," adding, "Because of this, a distorted form has emerged where multiple independently operated GAs unite into a single legal entity to strengthen their bargaining power with insurance companies."
In this analysis, qualitative differences such as GA contract retention rates or incomplete sales rates did not show any significant correlation with commissions. Researcher Kim pointed out that GA sales practices tend to be biased toward sales volume and commissions rather than consumer benefits and contract retention.
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Researcher Kim proposed, "To reduce incomplete sales occurring in the GA market, it is necessary to improve the commission system by referring to overseas precedents such as Australia, Japan, and Singapore to prevent excessive reflection of sales volume in commission calculations, and to effectively revise refund regulations."
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