Life Insurers' CM Channel Initial Premiums Jan-Apr Increase 4x YoY
Surpassing TM Channel with Upward Trend
[Asia Economy Reporter Ki Ha-young] This year, the cyber marketing (CM) channel of life insurance companies has shown rapid growth. Although face-to-face sales still hold a large share, the initial insurance premiums from the telemarketing (TM) channel have been surpassed, continuing the upward trend. This is interpreted as a result of the activation of non-face-to-face sales due to the impact of COVID-19 and the gradual achievements of each company's digital innovation.
According to the Life Insurance Association on the 29th, the initial insurance premiums from the CM channel of life insurance companies reached 21.1 billion KRW by April this year, a 298.1% increase compared to 5.3 billion KRW in April last year. This nearly fourfold increase reflects the accelerated growth as non-face-to-face sales expanded due to COVID-19.
By company, small and medium-sized firms showed remarkable performance. KB Life recorded the highest results among life insurance companies' CM channels. KB Life's initial insurance premiums from the CM channel from January to April this year were 12.3 billion KRW, about 40 times higher than the previous year. Following that, Kyobo Life Planet, the digital insurance company of Kyobo Life, recorded 5.5 billion KRW, a 223.5% increase compared to the previous year. Samsung Life also recorded 1.56 billion KRW, a 7.6% increase from the previous year.
On the other hand, the initial insurance premiums from the TM channel of life insurance companies from January to April decreased by 29% compared to the same period last year, reaching only 18.6 billion KRW. In the case of the TM channel, last year financial company call centers were highlighted as COVID-19 cluster infection sites, and since the implementation of the Financial Consumer Protection Act in March this year, difficulties in telephone sales have increased, gradually reducing the scale. Accordingly, insurance companies are also closing or downsizing their TM organizations.
However, despite the remarkable growth of the CM channel, face-to-face recruitment still overwhelmingly dominates life insurance companies. Since life insurance mainly deals with protection-type insurance with expensive premiums and complex product structures, insurance consumers prefer to subscribe through agents. In fact, as of April this year, the proportion of face-to-face recruitment in total initial insurance premiums was 98.42%, an absolute figure. This is followed by the CM channel at 0.84% and the TM channel at 0.74%. Although the CM channel's share nearly quadrupled from 0.2% in the same period last year, it still does not reach 1%.
The growth of the CM channel accelerated by COVID-19 is expected to further accelerate with the activation of various online mini-insurance products in the future. Recently, life insurance companies have been releasing various online mini-insurance products to target the 2030 generation, who are future potential customers, thereby attracting market interest and response. These products allow consumers to subscribe online to insurance that covers diseases and injuries with high demand at affordable premiums.
An industry official said, "As COVID-19 prolongs, the agent channel has shrunk, while the growth of non-face-to-face channels such as online has accelerated," adding, "The increase in online bancassurance due to the implementation of the Financial Consumer Protection Act also had an impact."
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