Declining Insurance Agents, GA Expansion + Impact of COVID-19

[Asia Economy Reporter Changhwan Lee] The number of insurance planners affiliated with domestic life insurance companies significantly decreased last year.

As the corporate insurance agency (GA) market expands, many planners are changing their affiliations, and the worsening sales environment due to COVID-19 is also analyzed to have contributed to the decline in the number of planners.

According to the Financial Supervisory Service and the Life Insurance Association as of the third quarter of last year, the number of insurance planners affiliated with domestic life insurance companies was 87,783, a 28.5% decrease compared to 112,780 at the end of 2020. This is the first time that the number of life insurance planners has dropped to the 80,000 range since related statistics have been compiled.

The decrease in specialized life insurance planners is understood to be due to multiple reasons. First, the expansion of the GA market has caused many planners to change their affiliations.

GA is an insurance agency operated through partnerships with multiple insurance companies and is sometimes called an insurance department store. Planners affiliated with GA can sell products from various insurance companies, not just those of a specific insurer, and have the advantage of being able to sell not only life insurance but also non-life insurance.

Because of cost-saving effects, recently, insurance companies have been establishing and operating GAs as subsidiaries. Last year, Hanwha Life and Mirae Asset Life actively pursued separation of manufacturing and sales by establishing GA subsidiaries. They are transferring their existing in-house planners to GA subsidiaries to expand their organizations.

An industry insider said, "GA can sell various products and reach more customers," adding, "Moreover, since they are subsidiaries, the headquarters can be somewhat free from regulations or penalties in case of insurance disputes, which is why life insurance companies are actively entering the market recently."

Along with the expansion of the GA market, the deterioration of the insurance sales environment due to COVID-19 is also cited as a factor in the decrease in the number of planners.

According to a survey conducted by the Korea Insurance Agency Association in December last year targeting 2,144 affiliated insurance planners, 51.2% responded that their sales performance was affected by COVID-19.

Among those who said they were affected, 26.2% reported that their income decreased by more than 30% compared to before COVID-19, indicating that the pandemic had a negative impact on the insurance sales environment.

The most common reason for restrictions on sales activities due to COVID-19 was "shrinkage of customer consumption sentiment" at 52.4%, followed by customers' avoidance of face-to-face meetings (35.7%).

A representative from the Korea Insurance Agency Association stated, "Insurance planners affiliated with agencies who have relatively short careers and low incomes in face-to-face sales channels seem to be experiencing significant difficulties in sales activities due to COVID-19."

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