Insurance Policy Retention Rate at 58.5% After 3 Years... FSS to Strengthen Oversight of Multi-Job Agents

Regulators Signal Tighter Oversight on "Multi-Job Agent" Planners Amid Market Concerns
3-Year Policy Retention Rate Still Trails Key Overseas Markets by Over 20 Percentage Points

Last year, the 3-year policy retention rate for insurance products sold by insurers reached 58.5%, marking a rise of more than 4 percentage points. However, the financial regulatory authorities pointed out that retention rates remain insufficient and announced plans to strengthen oversight of so-called "multi-job agent" insurance planners who work in insurance sales alongside their main occupation.

Financial Supervisory Service Headquarters, Yeouido, Seoul. Financial Supervisory Service

According to the "2025 Sales Channel Business Efficiency and Supervisory Direction for Insurance Companies" report released by the Financial Supervisory Service on the 29th, the 3-year retention rate for insurers last year was 58.5%. This represents a 4.3 percentage point increase from the previous year’s 54.2%.

Last year, insurers’ policy retention rates were 87.9% at 1 year, 73.8% at 2 years, 58.5% at 3 years, and 45.7% at 5 years. While the retention rates for short-term products (1 year) and mid-term products (2–3 years) rose compared to the previous year, the retention rate for long-term products (5 years or longer) declined.

However, compared to major overseas markets, the rates were about 20 percentage points lower. According to the Financial Supervisory Service, the 2-year (25th month) retention rate is 96.5% in Singapore, 90.9% in Japan, 90.0% in Taiwan, and 89.4% in the United States.

By sales channel, the 1-year retention rates for exclusive agents and corporate insurance agencies (GAs) were high at 88.4% and 88.9%, respectively, but after 3 years, these rates dropped by more than 30 percentage points to 57.7% and 58.0%.

The so-called "multi-job agent" planners have increased, expanding the size of the insurance market. As of the end of last year, there were 712,000 insurance planners in total, a 9.4% increase from the previous year.

The number of planners affiliated with agencies was 319,000, up 10.6% from the previous year (288,000). The number of exclusive planners rose 16.9% to 215,000. In contrast, the number of bancassurance planners (who sell insurance at bank branches) decreased by 0.4% to 176,000.

As the number of multi-job agents increased, the settlement rate and working conditions for planners deteriorated. Last year, the settlement rate for exclusive planners was 51.4%, a 1.2 percentage point drop from the previous year's 52.6%. The settlement rate refers to the proportion of newly registered planners who continue to work in sales one year after registration.

The average monthly income per exclusive planner was 3.29 million won, down 2.7% from the previous year. However, if multi-job agents are excluded, the average monthly income was 3.59 million won, a 6.2% increase from the previous year’s 3.38 million won.

A representative from the Financial Supervisory Service explained, "As the number of multi-job agents with significantly lower productivity increases, the earnings of exclusive planners have also decreased."

Last year, the average monthly new insurance premium per exclusive planner was 19.88 million won, a decrease of 2.12 million won (9.6%) compared to the previous year. This was because the growth rate of new insurance premiums (5.2%) was outpaced by the increase in exclusive planners (16.4%).

Last year, the rate of misselling was 0.022%, a decrease of 0.004 percentage points from the previous year.

The Financial Supervisory Service announced plans to improve policy retention rates, strengthen planner settlement, and establish market order by: ▲ supporting the stable implementation of the "1200% rule" for GAs starting this July; ▲ supporting the adoption of the new commission installment payment system from January next year; ▲ enhancing internal control over multi-job channels; and ▲ supervising competition in bancassurance sales.

The 1200% rule limits the sales commission paid to planners in their first year of employment to no more than 12 times the monthly insurance premium. Previously, GAs were exempt from this regulation, which led to a rapid increase in planner turnover and improper replacement contracts, thereby undermining trust in the insurance market.

A representative from the Financial Supervisory Service stated, "Although sales channels for insurance showed overall improvement in growth and efficiency last year, policy retention rates remain low, and major consumer risk factors persist by channel. We will work to prevent consumer harm by supporting the adoption of the revised commission system and strengthening internal controls over multi-job channels."

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