Decreasing Number of Insurance Planners... 6,500 Fewer Compared to Previous Year

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Last year, the number of insurance planners decreased by approximately 6,500 compared to the previous year due to the worsening business environment. The proportion of exclusive insurance planners who stayed with their companies for more than one year also fell below 50%. In other words, one out of every two planners left the company after one year.

According to the "2022 Insurance Company Sales Channel Business Efficiency Analysis" released by the Financial Supervisory Service on the 10th, the total number of insurance planners at the end of last year was 589,509. This represents a decrease of 6,476 (1.1%) compared to the previous year, due to attrition caused by the deteriorating business environment.

The retention rate of insurance planners, which indicates the proportion of planners who continue normal recruitment activities after one year, was 47.5%, falling below half. This is a 2.9 percentage point decrease from the previous year. However, the average monthly premium income per planner was 25.09 million KRW, and the average monthly recruitment commission was 2.75 million KRW, increasing by 14.2% and 2.6% respectively compared to the previous year.

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By channel, the sales share for life insurance companies (based on first-year premiums) was led by bank and other financial institution insurance agencies (56.2%), followed by direct sales by employees (19.2%), insurance agencies (12.6%), and exclusive insurance planners (11.6%). For non-life insurance companies (based on gross premiums), the order was agencies (42.0%), exclusive planners (22.7%), direct sales (16.0%), online-based CM (6.8%), telephone-based TM (5.9%), and financial institution insurance agencies (4.3%).

The insurance contract retention rate, which reflects the duration contracts are maintained after subscription, generally improved. The retention rates were 85.5% after one year, 69.4% after two years, and 58.3% after three years, increasing by 1.2%, 2.2%, and 5.7% respectively compared to the previous year. However, the three-year retention rate still hovered just above half.

Although face-to-face channels showed higher retention rates than non-face-to-face channels, the gap narrowed as the retention period lengthened. The difference in retention rates was 7.0 percentage points after one year but decreased to 3.6 percentage points after three years.

Contracts recruited through insurance agencies (GA) and exclusive planners (face-to-face) showed high retention rates in the early stage (87.2% after one year) but declined to 58.0% after three years, decreasing over time. TM channels showed retention rates below average throughout the period, while CM channels had low retention rates in the early stage.

For protection-type insurance, initial retention rates were higher compared to savings-type insurance. The retention rate gap for savings-type insurance widened to 4.4 percentage points after one year and 8.0 percentage points after two years, but reversed after five years (61st month), dropping to -4.0 percentage points as savings-type insurance retention rates surpassed protection-type.

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The incomplete sales rate, which refers to the ratio of cancellations due to quality assurance cancellations, complaints, invalidations, and other reasons, was recorded at 0.04% last year. This has gradually improved over the past five years from 0.15% in 2018. The incomplete sales rate for life insurance companies was 0.07%, higher than the 0.02% for non-life insurance companies, but this gap has narrowed from 0.17 percentage points in 2018.

By channel, for life insurance companies, the incomplete sales rate for face-to-face channels (0.08%) was higher than that for non-face-to-face channels (0.07%). Conversely, for non-life insurance companies, the incomplete sales rate for non-face-to-face channels (0.05%) was higher than that for face-to-face channels (0.02%). The incomplete sales rate for savings-type insurance was 0.08%, twice that of protection-type insurance (0.04%).

A Financial Supervisory Service official explained, "We plan to continuously monitor retention and incomplete sales rates to establish a culture of complete sales, while strengthening consumer protection through rational improvements to the insurance recruitment system and enhanced internal controls."

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