[Becoming an Insurance Insider] Frequent Job-Hopping Agents... Overflow of Unmanaged Insurance Policies

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[Asia Economy Reporter Oh Hyung-gil] It has been revealed that more than 30 million insurance contracts were left unattended without a manager last year due to frequent turnover of insurance planners.

The retention rate of insurance planners staying at one insurance company for more than one year after joining is only 40.9% on average for life insurance companies and 56.7% on average for non-life insurance companies.

When the insurance planner in charge of a policy moves to another company, the insurance company replaces the planner with a new one, raising concerns that prompt and efficient assistance may not be available in case of an insurance accident.

According to data received by Hong Sung-guk, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, from the Financial Supervisory Service, the number of contracts transferred to other insurance planners due to turnover and resignation reached 30.94 million last year alone.

Transfer refers to cases where the replacement of the insurance planner in charge is completed within the month the planner leaves or resigns. In the life insurance industry, the number of transferred contracts last year was counted at 17,251,954. The non-life insurance industry recorded 13,694,077 contracts.

The annual transfer of over 30 million contracts is due to the frequent turnover of insurance planners and the low rate of settling in at insurance companies or agencies.

Insurance contracts for which the transfer was not completed within the month the planner left or resigned and are left unmanaged as of the end of the month are classified as orphan contracts.

The number of orphan contracts at the end of each month last year ranged from 331,049 to 409,398, averaging 365,918 per month.

The insurance company with the highest number of orphan contracts was Shinhan Life. Shinhan Life recorded an average of 108,797 orphan contracts per month last year, followed by Kyobo Life (48,338), Chubb Life (47,136), KDB Life (42,739), and AIA Life (16,957).

In the non-life insurance industry, Lotte Non-Life Insurance and Heungkuk Fire & Marine Insurance recorded monthly averages of 32,662 and 10,273 contracts, respectively.

Representative Hong pointed to the retention rate of insurance planners as the fundamental cause of the high number of orphan contracts. He emphasized, "The insurance industry and financial authorities must seriously recognize not only incomplete sales but also incomplete management issues and prepare fundamental improvement measures."

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