[Issue Interview] Sungwan Bae, CEO of Hana Insurance: "Face-to-Face and Long-Term Insurance Deliver Results... Confident in Turning Profitable by 2027"

After Taking Office in 2024, Strengthened Capabilities in Face-to-Face, Long-Term Insurance, and GA Channels
Significantly Reduced Losses... Next Year to Focus on Quality Growth
Aiming to Transform into a "Customer Lifecycle Care-Oriented Insure

The term "digital transformation" now feels almost outdated, as non-face-to-face and digitalization are rapidly advancing across all industries. The financial sector is no exception. However, in the insurance industry, face-to-face interactions still far outpace digital channels. As of last year, face-to-face channels accounted for 99% of life insurance sales and 71% of non-life insurance sales.

Last month, the merger of Carrot Insurance, Korea's first digital insurance company, into Hanwha General Insurance served as a symbolic event highlighting these structural limitations. Many non-life insurance companies that once positioned themselves as digital insurers are now facing significant dilemmas. They are at a crossroads: should they continue to endure losses and persist with digital and non-face-to-face models, or should they return to basics and strengthen face-to-face sales?

On November 6, The Asia Business Daily met with Sungwan Bae, CEO of Hana Insurance, who had already identified these issues early on and was proactively transforming the organization. After working at Samsung Fire & Marine Insurance for over 30 years, Bae became the first external CEO of Hana Insurance in January 2024. Immediately after taking office, he shifted the company's strategy away from a digital-centric approach and reorganized the business to focus on face-to-face sales and long-term insurance. Bae said, "Since Hana Insurance was launched in 2020, we have aimed to become a comprehensive digital non-life insurer and have pursued various related businesses. Since I became CEO, we have been pursuing a traditional non-life insurance model while also maintaining an online presence."

Sungwan Bae, CEO of Hana Insurance. Hana Insurance

Strengthening Fundamentals through 'Face-to-Face and Long-Term Insurance'... Cutting Losses by More Than Half

Bae initiated these changes because Hana Insurance's previous business structure was specialized in digital, focusing on auto, short-term, and micro-insurance. This model had limitations in securing insurance contract service margins (CSM), a key profitability indicator under the International Financial Reporting Standards (IFRS17) introduced in 2023.

Since Bae's appointment, Hana Insurance has achieved structural improvements in both workforce composition and product portfolio. The number of long-term insurance sales staff more than doubled from 113 in 2023 to about 250 last year. The number of sales managers grew from 59 in 2023 to 121 in 2024, reaching 200 as of last month. The corporate insurance agency (GA) sales organization was also restructured, expanding from 7 business units and 17 branches in 2023 to 9 business units and 35 branches currently. The number of new long-term insurance product developments and revisions surged from 4 in 2023 to 14 in 2024, and reached 24 as of the end of last month. With the expansion of long-term insurance, the proportion of auto insurance-which has seen rising loss ratios-fell below half.

As field sales regained momentum, performance also improved. Net losses shrank from 87.9 billion won in 2023 to 27.9 billion won last year after Bae took office. For the cumulative three quarters of this year, the net loss stood at 32.4 billion won. Bae stated, "Our internal goal is to turn a profit by 2027. Considering the pace of structural improvement and the strengthening of capital and sales so far, I am confident that we can achieve this."

Focusing on Internal Stability from Next Year... "Becoming a Customer Life Cycle Care-Oriented Insurer"

Internet-only banks such as KakaoBank, K Bank, and Toss Bank, which once promoted digital and non-face-to-face services, are now being recognized as industry "disruptors" after posting record results. However, insurers that pursued digital models have not yet escaped years of losses.

Bae believes that overcoming these structural limitations requires regulatory flexibility tailored to the size and circumstances of each insurer, rather than uniform regulations. He explained, "Digital insurers and latecomers in long-term insurance need institutional flexibility to meet customer demands and ensure market diversity. As product sales methods diversify through digital platforms, it is important to create regulatory conditions that are more open to innovation than the current framework."

Unlike other digital insurers, Hana Insurance holds a comprehensive non-life insurance license, allowing for a swift transition to face-to-face and long-term insurance. However, the company has not overlooked the growth potential of non-face-to-face channels. Bae stated, "Based on our strategy focused on GA channels and long-term insurance to build fundamental strength and economies of scale, we will also enhance digital channels and diversify products to strengthen competitiveness in non-face-to-face channels. In the mid- to long-term, we plan to balance and ensure that face-to-face and non-face-to-face channels complement each other."

Bae has so far focused on expanding the company's infrastructure for growth and increasing sales to restructure the business. Starting next year, the company plans to focus on qualitative growth, improving both profitability and efficiency to strengthen internal stability. Bae said, "We will work to advance products and services using artificial intelligence (AI) and expand ESG (environmental, social, and governance) initiatives. By enhancing services in various areas such as auto, lifestyle, health, and senior care, we aim to become a 'customer life cycle care-oriented insurer.'"

◆Profile

▲Born in 1968 ▲Graduated from Yeongnam High School in Daegu and Yeungnam University with a degree in Economics ▲Joined Samsung Fire & Marine Insurance in 1992 ▲Senior Executive at Gangseo Business Headquarters, Samsung Fire & Marine Insurance ▲Managing Director, CPC Planning Team, Samsung Fire & Marine Insurance ▲Executive Vice President, Long-Term Insurance Division, Samsung Fire & Marine Insurance ▲Appointed CEO of Hana Insurance in 2024

Sungwan Bae, CEO of Hana Insurance. Hana Insurance