Variable Insurance Attracts 2 Trillion Thanks to COVID... Intense Competition Among Small and Medium Life Insurers (Comprehensive)

"Easy and Convenient" Variable Insurance Enhancement Strategy
Advancing Non-Face-to-Face Systems... AI-Based Fund Management Too

[Asia Economy Reporter Oh Hyung-gil] Since the COVID-19 pandemic, the popularity of variable insurance, whose sales have surged in the life insurance market, continues to grow, prompting small and medium-sized life insurance companies to embark on multifaceted innovation efforts. Their strategy is to enhance systems so that subscribers can more conveniently enroll in variable insurance and easily manage their products remotely.

According to the insurance industry on the 28th, KB Life has begun developing the ‘WISE Fund Management’ system to manage variable insurance funds. This system focuses on consumer convenience.

Through a mobile application (app), customers will be able to directly check their variable insurance fund contract details and view fund status and available fund options at a glance. Additionally, the system aims to facilitate easy comparison of returns by fund and fund switching, which are the most important aspects of variable insurance.

KB Life posted a net loss of 11 billion KRW in the first half of this year, turning to a deficit compared to a loss of 11.8 billion KRW in the same period last year. This deficit is unavoidable for market expansion. As new contract performance increased through corporate agencies (GA) and KB Kookmin Bank’s bancassurance (insurance sold at banks), commissions paid to these channels also rose.

Hana Life aims to enhance customer profitability by introducing artificial intelligence (AI) into variable insurance, recommending variable insurance funds and rebalancing funds. Hana Life’s AI Global Equity Variable Asset Management diversifies investments through global ETFs while providing functions to prepare for downside market risks.

Hana Life’s net profit in the first half of this year was 20.9 billion KRW, down 10.3% compared to the same period last year. However, it succeeded in improving its product portfolio centered on variable insurance. Special account income commissions from variable insurance and retirement pensions surged 141.5% year-on-year to 44.2 billion KRW.

DGB Life has also been striving to expand its share of variable insurance since last year. After recording 144.9 billion KRW in initial premiums for variable insurance last year, it collected 89.6 billion KRW in initial premiums through April this year. This scale ranks among the top in the life insurance industry. Under the leadership of CEO Kim Seong-han, who took office in September last year, the proportion of variable insurance sales reached 70% on a monthly payment basis.

Initial premiums for variable insurance have surged this year. From January to April, domestic life insurers received 1.9682 trillion KRW in initial premiums for variable insurance, more than doubling from 721.8 billion KRW in the same period last year.

Last year, initial premiums for variable insurance by life insurers recorded 3.1044 trillion KRW, growing more than 70% compared to the previous year. After remaining at the trillion KRW level annually since 2011, initial premiums surpassed 3 trillion KRW for the first time in 10 years, continuing growth.

An industry insider said, "Interest in whole life insurance has decreased significantly compared to before, and consumer interest in variable insurance is growing following the recent stock market boom. We are focusing on developing consumer-friendly services by strengthening fund management through AI-based robo-advisors."

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