Insurance Companies Say "Grow Subsidiary Corporate Agencies More"... Rising as a 'GA Rival' (Comprehensive)

Hanwha Life Insurance, Hanwha Life Lab Capital Increase
Targeting Top 10 Entry in GA Industry

Hana Insurance, Subsidiary Hana Financial Find
Insurtech Platform 'New Start'

[Asia Economy Reporter Oh Hyung-gil] Insurance companies are focusing on expanding their subsidiary-type corporate agencies (GA). While the previous approach was a ‘separation of production and sales’ model to strengthen sales channel influence, recently, they have been entering IT-based platform development through GAs, creating a new competitive landscape in the GA industry.

According to the insurance industry on the 24th, Hanwha Life completed a 21 billion KRW paid-in capital increase on the 16th through its subsidiary Hanwha Life Lab. This is the second capital expansion following a 20 billion KRW capital increase in 2018. Hanwha Life Lab is a corporation created last December by merging Hanwha Life Asset, established in 2005, with Hanwha Financial Asset, and adopted its new name in April.

Hanwha Life Lab conducts insurance sales through business partnerships with 11 life insurance companies and 9 non-life insurance companies, including Hanwha Life. Although it currently has only 1,610 affiliated planners as of the first half of the year, it plans to secure 5,000 planners by 2023 to enter the GA industry’s ‘Top 10’.

Hanwha Life Financial Service, established in April by separating the sales channel from Hanwha Life, is also evaluated to have successfully settled.

With 18,765 affiliated planners, it quickly rose to first place in the GA industry. The new contract amount in the first half of the year also recorded 42.2 billion KRW. Although it posted a net loss of 29 billion KRW in the second quarter after separation, it aims to turn profitable in 2023 by increasing sales of non-life insurance products.

Its mid-to-long-term plan includes leading the market with an overwhelming gap from other GAs by achieving about 26,000 planners and a net profit of over 210 billion KRW by 2025.

Hana Non-Life Insurance also recently announced a fresh start by changing the name of its subsidiary GA Hana Financial Partner, established in March, to ‘Hana Financial Find.’ It aims to become a financial platform based on ‘Insurtech’ (a combination of insurance and technology), moving away from a planner-centered GA.

They appointed Nam Sang-woo, former CEO of Rich Planet who succeeded with the insurtech platform ‘Goodrich’ after working at Lycos Korea and SK Communications, as the new CEO, and are promoting platform construction projects targeting next year. The platform will provide functions such as insurance analysis, claims filing, and comparison quotes, and is known to include a profile feature allowing insurance customers to directly view planners’ names, specialties, photos, and careers to entrust their planning.

CEO Nam stated, "In the platform era represented by the metaverse (extended virtual world), we will further strengthen digital capabilities," and expressed the ambition to "pursue a new insurance ecosystem where customers, consulting experts, and insurers are naturally connected."

Recently, the GA industry has noted the remarkable growth of insurance company subsidiary GAs. Leading the way is Hanwha Life Financial Service, followed by Mirae Asset Financial Service (3,862 affiliated planners), Shinhan Financial Plus (3,241), Samsung Fire & Marine Financial Service (3,117), and Samsung Life Financial Service (1,860), whose scale is comparable to large GAs.

As the influence of large GAs with sales networks grows, insurance companies are choosing a strategy to develop subsidiary GAs as rivals. Kim Dong-kyum, a research fellow at the Korea Insurance Research Institute, diagnosed, "Unlike exclusive planners of insurance companies, GAs handling various products have an obligation to explain product comparisons but may encourage contracts mainly for high-commission products to consumers. It is not easy for insurance companies to suppress this."

He added, "If functions overlap between the parent company’s exclusive organization and the subsidiary-type GA’s sellers, conflicts between the two may intensify," advising, "Customer and product segmentation and role adjustments between channels are required to resolve this."