Insurance Companies' Performance Soars... 9 Out of 10 Agents Say "Income Decreased"

Status of Insurance Companies' Premium Income

[Asia Economy Reporter Oh Hyung-gil] Since the COVID-19 pandemic, insurance companies have recorded strong earnings, while insurance agents have continued to experience a decline in income.

Agents have faced a deteriorating overall sales environment due to difficulties in face-to-face sales, but insurance companies are seeking breakthroughs through structural improvements by promoting non-face-to-face sales based on digital transformation.

According to the insurance industry on the 15th, the cumulative insurance premiums collected by insurance companies from the first to the third quarter of last year reached 155 trillion won, a 2.1% increase compared to the same period the previous year. In the case of life insurance companies, sales of variable insurance and protection insurance increased due to the stock market impact, and non-life insurers saw good premium income from long-term, general, and automobile insurance.

In particular, net profit during the same period rose sharply by 37.3% year-on-year to 7.6305 trillion won. The loss ratio stabilized due to social distancing and rising interest rates, reducing insurance operating losses.

In contrast to the well-performing insurance companies last year, 9 out of 10 insurance agents experienced a decrease in income. One in four saw their income drop by more than 30%.

According to a perception survey conducted by the Korea Insurance Agency Association targeting agents, 51.2% reported that the COVID-19 pandemic affected their sales performance, and 93.3% responded that their income had decreased.

More than half (51.0%) said their income had decreased by more than 20% compared to before COVID-19, and 26.2% reported a decline of more than 30%.

They cited reasons for the difficulty in sales as ‘shrunken consumer spending sentiment’ (52.4%) and ‘customers’ avoidance of face-to-face meetings’ (35.7%), indicating significant challenges in face-to-face sales channels.

When asked how much the COVID-19 pandemic affected their sales performance, 51.2% answered ‘there was an impact,’ with 38.5% of those saying it was ‘a very significant impact.’

Jang Nam-hoon, Head of Strategic Support at the Insurance Agency Association, said, “It appears that agents affiliated with insurance agencies who have relatively short careers and low incomes are facing great difficulties in sales activities due to COVID-19. Since the shift from face-to-face to non-face-to-face sales is expected to accelerate, it is necessary to respond more actively to online transformation.”

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