Insurers Downsize Staff, Branches
South Korean life insurance companies are reducing their personnel and branches with their profitability on the decline due to a slow economic growth, low interest rates and a low fertility rate.
The Korea Life Insurance Association announced on Feb. 4 that the number of 24 life insurance companies’ offices and branches in and out of South Korea fell from 3,510 to 3,056 from November 2017 to November 2019. During the same period, they reduced their sales headquarters and branches from 151 to 102 and from 1,128 to 920, respectively.
For example, Mirae Asset Life Insurance, which merged with PCA Insurance in 2018, reduced its branches and offices from 153 to 51. The number fell by 53 from 181 in Shinhan Life Insurance.
The number of those working for the companies edged up from 25,383 to 25,598 from 2017 to 2018 and fell to 25,421 in 2019. For instance, 63 out of 856 left Lina Korea between November 2017 and November 2019.
Those companies’ business conditions are continuing to deteriorate. Prolonged low interest rates already dropped their asset management return to a record-low level and IFRS 17, which is scheduled to be introduced in 2022, is yet another burden for them.