Shin Chang-jae, CEO and Chairman of Kyobo Life, emphasized that the commission distribution system, which pays insurance agents over an extended period, will improve the short-term performance-driven practices in the insurance industry.
Kyobo Life announced on the 10th that Shin made these remarks during the 68th anniversary celebration held on August 7 at the Kyobo Life Building in Jongno, Seoul. He stated, "Most insurance companies have neglected maintenance services for existing customers while engaging in excessive competition for commissions and securing agents to boost new contract sales."r />
Shin diagnosed that this competition has led to incomplete sales, replacement contracts, and orphan contracts, ultimately harming customers.
He noted, "Following the regulation on commission for GA agents implemented in July, the expansion of the commission distribution period for insurance agents starting in January next year will be a crucial step in correcting the short-term performance issues and restoring the life insurance industry from a 'money game' back to a 'story of neighborly love.'"
The commission distribution system involves spreading out the payment of agent commissions, which were previously concentrated within the first year of contract signing, over several years. This will be expanded to four years starting in 2027 and seven years from 2029.
Shin stressed the need for a sales culture focused on maintaining and managing customer contracts over the long term rather than merely expanding new contracts. He stated, "We need to consistently secure and train 'farmer-type' agents who maintain contracts until customers receive their insurance payouts, rather than 'hunter-type' agents who focus solely on signing new contracts."
He added that it is essential to enhance agent retention and protection rates to establish a service culture that takes responsibility for customer protection from the point of insurance enrollment through contract maintenance to payout.
Shin remarked, "In this era of 'survival of the fittest,' only companies that respond quickly to their environment will survive. Kyobo Life must also swiftly transition to value management centered on customer and shareholder value as required by IFRS 17."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.