Insurance Agents and Card Recruiters Disappear... Narrowing Positions Due to COVID-19 (Comprehensive)

This Year, 20,000 Exclusive Life and Non-Life Insurance Agents Drastically Decrease
Due to the Biggest Impact of Sales and Underwriting Separation
Card Recruiters Also Decrease by About 500
Impact of Non-Face-to-Face Sales Environment and Financial Consumer Protection Act

[Asia Economy Reporter Ki Ha-young] The number of insurance planners and card solicitors, who are at the forefront of financial sales, has sharply decreased this year. This is interpreted as being influenced by the changes in the sales environment centered on non-face-to-face interactions after COVID-19 and the strengthened regulations by financial authorities following the implementation of the Financial Consumer Protection Act.

According to the Life and Non-life Insurance Association on the 12th, as of May this year, the number of exclusive planners (including cross planners) for life and non-life insurance was 179,971, which is about 10% less compared to 199,877 at the end of last year. Nearly 20,000 exclusive planners have disappeared this year.

This was mainly due to the separation of manufacturing and sales (제판분리) by Hanwha Life and Mirae Asset Life, which separated their planner organizations. In the case of Hanwha Life, the number of exclusive planners as of May was 2,421, a decrease of 16,799 compared to the same period last year. During the same period, Mirae Asset Life also recorded a sharp drop of 3,373, with only 114 exclusive planners remaining. Although the number of exclusive planners for non-life insurance increased by 2,704 this year, the overall number of planners decreased due to the impact of the separation of manufacturing and sales and the reduction in exclusive planners at life insurance companies.

The number of card solicitors also decreased by 544 this year. According to the Credit Finance Association, the number of card solicitors for the seven full-time card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana Card) was 8,673 as of the end of July this year. This is a 5.9% decrease compared to 9,217 at the end of last year. The number has been continuously declining since it fell below 10,000 last year. The number of card solicitors, which reached 20,289 in 2015, was recorded as 16,658 in 2017, 12,607 in 2018, 11,382 in 2019, and 9,217 in 2020, shrinking to about one-third over six years. The industry expects the number of card solicitors to fall below 8,000 in the second half of this year if this trend continues.

Financial Supervisory Service Attributes Decline in Insurance Planners and Card Solicitors to Changes in Sales Environment Due to COVID-19

The sharp decline in the number of planners and card solicitors is largely attributed to changes in the sales environment. With the expansion of non-face-to-face sales channels due to COVID-19, the space for face-to-face channels is gradually shrinking. In the case of credit cards, the online channel's credit card application rate was 37.9% in the first half of last year, an increase of 11.3 percentage points compared to the end of the previous year. The online channel is preferred by younger customers because it can return up to 100% of the annual fee as benefits. COVID-19 accelerated the change in sales channels in the already saturated card market. Although face-to-face channels are still dominant in insurance, the online channel, known as Cyber Marketing (CM), is also rapidly growing. As of May this year, the first-year insurance premiums for life insurance companies reached 24.681 billion KRW, 3.8 times higher than the previous year.

The strengthened supervision by financial authorities after the Financial Consumer Protection Act also influenced the decrease in the number of planners and card solicitors. Concerns about their aggressive sales practices potentially violating the Act have led to a cautious atmosphere regarding active sales orders.

The outlook is not optimistic. The change in sales channels is accelerating, and regulatory conditions remain tough. Since last month, employment insurance enrollment has been mandatory for special employment types such as insurance planners and card solicitors, which may lead to restructuring of sales channels due to the associated cost burden.

An industry official said, "With the rapid shift to non-face-to-face sales channels due to COVID-19, the space for face-to-face card solicitors and insurance planners is shrinking. This trend is irreversible, so their position is expected to narrow further in the future."

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