[Reporter’s Notebook] When Everyone Claims to Be Number One, Consumers Lose Their Way

The Era of "Investment-Driven Pensions":

Insurance Companies' Impatient Pursuit

Change the Comparison Criteria, and the Leader Changes Too

The More Important Question Than "Number One in Returns"

"We are ranked number one in defined contribution (DC) retirement pension returns in the industry." (Insurance Company A)

"If you change the comparison criteria, we are number one." (Insurance Company B)

Recently, insurance companies have been insisting they are number one in retirement pension competitiveness, causing confusion among consumers.

This scene of insurers each claiming to be first is largely due to their late entry into the enormous retirement fund market. As of the first quarter of this year, the total amount of retirement pension reserves in Korea is estimated to have surpassed 500 trillion won. In particular, banks and securities firms have rapidly attracted funds by promoting performance-based products such as exchange-traded funds (ETFs) amid a surge in stock investments. For financial institutions, including insurers, this market has become one from which they can no longer retreat.

Insurance companies are now moving to regain their presence in the DC and Individual Retirement Pension (IRP) markets. After previously focusing on the stability of defined benefit (DB) plans and maintaining a DB-centered portfolio—thereby lacking retail touchpoints—they are now establishing dedicated DC/IRP teams and reorganizing their channels to address these weaknesses. They are also expanding investment products, subdividing sales organizations, and strengthening advisory functions tailored to individual customer preferences, actively jumping into the competition for “managed pensions.”

The problem is that as competition intensifies, each company has started to highlight whatever standards are most favorable to itself. By selecting different comparison criteria—such as reserve size—each claims the "industry's best" returns. As a result, for the same DC pension product, different companies may simultaneously claim to be number one.

The figure "number one" can serve as an indicator to help consumers make choices. However, if the criteria vary, this indicator only clouds judgment. Consumers are left wondering, "So, what am I supposed to believe?"

When the term "number one" is used on different standards, it becomes a marketing slogan rather than an explanation. What consumers need is not "who is number one," but "why these results came about."

If there is no explanation of the measurement criteria and how they contribute to stable retirement, then the number is closer to confusion than information.

Recently, Samsung Life Insurance, the leader in Korea’s life insurance industry, lost its number one spot in retirement pension reserves for the first time in 20 years due to a decline in DB reserves, with Shinhan Bank taking the lead. In this situation, insurance companies’ claims of being "number one" only reveal their anxiety about losing ground in the market.

The essence that insurance companies should show is not a promotional phrase like "number one in retirement pension returns." In an ever-expanding retirement pension market, they should focus first on how to protect customers’ retirement assets.

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