COVID-19 Offers a Chance for Reform
Some insurers utilized the COVID-19 situation as a chance for reform unlike the predictions that the Q1 performance of the insurance industry would plummet due to the extremely low interest rates and face-to-face marketing contraction triggered by the pandemic. They focused on non-face-to-face marketing, concentrated investments for more convenience of online customers and overhauled their asset portfolios.
Samsung Fire & Marine Insurance announced on May 14 that its Q1 direct premiums written totaled 4,860.6 billion won, up 5.9 percent from a year ago, and the Q1 initial premium of its long-term personal insurance increased 10.1 percent during the same period in spite of face-to-face marketing contraction.
Especially, its cyber marketing sales showed a substantial growth. The number of new personal insurance contracts based on cyber marketing almost doubled by 17,012 and the insurance premium almost tripled. The ratio of cyber marketing-based new contracts to new contracts rose from 7 percent to 12 percent, too.
Also, combination between face-to-face marketing and digital platforms accelerated after the outbreak of COVID-19. Samsung Fire & Marine Insurance expanded mobile insurance subscription and around-the-clock marketing support while minimizing insurance planners’ face-to-face marketing activities. The ratio of electronic signatures on tablet PCs rose from 81.9 percent to 92.6 percent and that of digital long-term underwriting review increased from 64 percent to 75.6 percent.
Hanwha Life Insurance’s Q1 net profit, in the meantime, rose 2.66 percent year on year to 47.8 billion won. In addition, despite lowered interest rates, it posted a return on assets under management of 4.36 percent, up 0.51 percentage point from the previous quarter, by replacing foreign bonds with domestic bonds to cope with an increase in exchange hedging costs attributable to a rise in forex rates.
Lotte Non-life Insurance announced on May 8 that its Q1 net profit totaled 38.6 billion won, more than 30 percent higher than the latest market consensus. This improvement was based on an increase in the ratio of long-term personal insurance and a reduction in the ratio of car insurance. In the first quarter, its new coverage insurance showed a year-on-year increase of 12.7 percent while its car insurance risk margin rose 10.4 billion won year on year and 74.8 billion won from the previous quarter.