Life insurers are downsizing the number of their insurance planners to cope with declining demand amid the low birthrate and rapidly aging population.
Life insurers are downsizing the number of their insurance planners to cope with declining demands amid the low birthrate and rapidly aging population.
According to the Korea Life Insurance Association (KLIA), 24 life insurers in Korea underwrote 153 trillion won ($136 billion) worth of new insurance contracts in the first half of this year, down 11 percent from a year ago.
The sum of initial premiums they earned was 2.75 trillion won in the period, down nearly 100 percent from last year’s figure of 5.11 trillion won.
An initial premium is the premium paid at the beginning of the policy, often used as a barometer to assess an insurance firm’s growth rate. The figure shows that the nation’s life insurers faced a daunting hurdle in the first half of this year with their initial premiums halved.
In 2015 and 2016, Korea’s life insurers earned more than 7 trillion won worth of initial premiums.
“Life insurers suffered a bitter setback in their face-to-face insurance sales in the first half of the year. They now have no choice but to reduce their fixed costs, including labor, amid the decline in demand,” said a Kyobo Life Insurance official.
“Still, the face-to-face channel accounts for a large portion of their sales. It is one of the reasons why they have maintained a large number of insurance planners who do the face-to-face sales, but the trend has changed.”
Of the 2.75 trillion won worth of initial premiums the 24 life insurers managed to earn in the first half, 2.65 trillion won came from the face-to-face sales. The figure is half the figure from the same period last year.
“Life insurers do not need to have a large number of insurance planners anymore considering their deteriorating earnings from ace-to-face sales.”
The KLIA said 118,000 life insurance planners are registered with the agency as of June, down nearly 40,000 from its 2013 figure of 153,000.
“It’s true. There are not many things life insurance planners can do at the moment,” a 35-year-old insurance planner surnamed Song told The Korea Times.
“No one is looking for long-term deposit products anymore. Life insurers also encourage their planners to sell variable insurance products, probably the only thing life insurance planners can sell at the moment. For this reason, they are in exodus to non-life insurance firms.”