"Competition with Sangjo Companies Looms"…Intense Battle to Secure Insurance Agents

Decrease in 설계사 Workforce... Increased Competition as Many Target Them

"Now we have to compete even with sangjo companies."

According to industry sources on the 13th, insurance companies, especially life insurers, are focusing on securing insurance agents. With sangjo companies also stepping in to secure insurance agents, fierce competition beyond industry boundaries is unfolding. Unlike non-life insurers, whose products such as indemnity medical insurance or automobile insurance are relatively easy to understand and have active online sales channels like direct channels, life insurers still focus on whole life insurance, which is mainly sold face-to-face, making the securing of insurance agents directly linked to performance.

An official from a major life insurer explained, "Recently, sangjo companies have also been trying to attract insurance agents," adding, "The nature and content of the work are not significantly different, and the customer base is similar, so it seems they are aiming for customer acquisition effects as well." Since the funeral services provided by domestic sangjo companies are so similar to those offered by insurance companies overseas, they are trying to attract insurance agents who are "immediately ready for deployment." It is known that agents are paying attention to sangjo services, which have increasing demand in the aging era and are easier to sell compared to whole life insurance, which requires multiple visits to customers and whose demand is gradually decreasing.

This means that competitors have only increased over a limited supply. Half of new agents already leave insurance companies within a year. According to the Financial Supervisory Service disclosure, as of the first half of last year, the average 13-month agent registration retention rate was 41.4% for life insurance and 53.2% for non-life insurance. The agent registration retention rate indicates whether new insurance agents are still actively working 13 months after registration. Even large companies like Samsung Life (49.4%) and Kyobo Life (41.8%) had retention rates below 50%. This means that one out of every two agents leaves within a year.

Since the number of agents is also decreasing, competition is expected to become even more intense. According to the Life and Non-Life Insurance Associations, as of the end of November last year, the total number of exclusive agents registered with each association was 165,294, a 12.5% decrease compared to 188,957 at the end of 2017. Large life insurers such as Hanwha Life and Kyobo Life have also entered the insurance agency (GA) market to secure additional agents. Hanwha Life increased its agent scale to 23,000 by acquiring PeopleLife, ranked sixth in the industry, earlier this year. Kyobo Life, which maintained an exclusive agent organization, has recently been focusing on the GA channel. A branch manager of a life insurer said, "Not only GAs but also card sales, sangjo companies, and even cosmetics door-to-door sales are targeting insurance agent personnel, making management difficult," adding, "Since face-to-face sales are still absolute in life insurance, we are paying more attention to preventing attrition."