Implications of Decreasing Salesperson

The ratio of insurance sales by insurance salespersons in Korean life insurance companies dropped from 39.7% to 19.5% between 2008 and last year.
The ratio of insurance sales by insurance salespersons in Korean life insurance companies dropped from 39.7% to 19.5% between 2008 and last year.

 

The Korea Insurance Research Institute said on July 17 that the ratio of insurance sales by insurance salespersons in South Korean life insurance companies dropped from 39.7% to 19.5% between 2008 and last year. Likewise, the numbers of insurance salespersons employed by South Korean life and non-life insurance companies fell 12.3% and 14.6% to 102,148 and 81,148 between 2012 and last year, respectively. 

Between 2007 and 2015, the ratio of employed life insurance salespersons in their twenties decreased from 8.7% to 5.6% and that of employed life insurance salespersons in their thirties declined from 38.5% to 20.3%. On the contrary, the ratio of those in their fifties jumped from 12% to 29% during the same period, when 19% of the total employees received 1.09 million won or less in personal monthly salary, which is less than the legal minimum wage.

“This trend is likely to continue for the time being as new sales and marketing channels such as online channels and infomercials are growing,” the institute explained, adding, “Employment of insurance salespersons requires recruiting, training and management whereas the new methods are much more convenient in various aspects.”

Under the circumstances, major players in South Korea that are enjoying higher market shares with wide networks of employed salespersons are likely to face a decline in market presence. The share of the top three in the life insurance sector, that is, Samsung Life Insurance, Kyobo Life Insurance and Hanwha Life Insurance, fell from 66% to 54% between 2005 and 2014.

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