Following the relaxation of bancassurance sales limits by financial authorities, the landscape of life insurance sales at major banks has changed. In the first half of this year, non-affiliated insurers surpassed affiliated ones at Shinhan Bank and Hana Bank, which had previously held the top sales position with their affiliates at the end of last year. However, the highest sales share for individual insurers was 27.2%, indicating that no single large firm dominated the market.
According to the financial sector on July 28, an analysis of sales data from KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup banks revealed that the top life insurance sales at Shinhan and Hana banks shifted from affiliated to non-affiliated insurers. This marks the first time non-affiliated insurers have claimed the top position in a semi-annual basis at these banks since sales share data became publicly available.
Bancassurance refers to the practice of banks partnering with insurance companies to sell insurance products at their branches. To prevent excessive concentration of sales with specific insurers, a '25% rule' limiting the sales share of any one insurer has been in place since 2005. In February, financial authorities relaxed the sales limits for non-affiliated insurers to 50% for life insurance and 75% for non-life insurance to expand consumer choice. However, the existing caps remain at 25% for life insurers and 33% for non-life insurers affiliated with the banks.
Among the banks, the rise of non-affiliated insurers was particularly notable. At Shinhan Bank, Shinhan Life, which held a 23.9% share at the end of last year, dropped to 13.5% in the first half of this year, while Hanwha Life rose to 27.2% to take the lead, followed by Kyobo Life at 16.9%. Similarly, at Hana Bank, Hana Life, which had a 23.5% share at the end of last year, was overtaken by Samsung Life, which claimed 24.7% in the first half of this year. The relatively low number of affiliated insurers and the impact of sales of savings products are believed to have influenced these results. At NH Nonghyup Bank, Hanwha Life (16.23%) narrowly surpassed its affiliate NH Nonghyup Life (16.11%), while Woori Bank saw Hanwha Life and Kyobo Life tie for first place.
In contrast, KB Kookmin Bank maintained its position with KB Life Insurance, which held an 18.41% share, making it the only major bank where an affiliated insurer retained the top spot.
When the regulations were relaxed in February, there were concerns that sales might become overly concentrated with specific large insurers. However, the sales share in the first half of the year peaked at 27.2%, indicating that significant concentration did not occur.
In the non-life insurance sector, the concentration of sales among top firms was higher than in life insurance. At Woori Bank, NH Nonghyup General Insurance and Hyundai Marine & Fire Insurance accounted for 90.5% of total sales. KB Kookmin Bank and NH Nonghyup Bank also saw the top three insurers exceed 90% of their sales.
The high concentration in non-life insurance is attributed to a market structure where fewer insurers participate in the bancassurance channel. An industry insider noted, "The savings insurance products primarily sold at bank branches have limited effects on scale and profitability under the new accounting standards (IFRS 17), along with capital burdens. Additionally, core products from non-life insurers, such as auto insurance and health insurance, are difficult to handle through the bancassurance channel."
* This article has been translated by AI.
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