Value context and insight. lkm@koreatimes.co.kr
Financial CEOs aggressive in marketing insurance products
NongHyup Financial Group Chairman Kim Gwang-soo
By Lee Kyung-min
By Lee Kyung-min
More heads of life and non-life insurers are buying insurance products themselves in a bid to help secure extra customers, companies said Sunday.
The promotional efforts help firms' sales agents with marketing in assuring product quality, as people tend to trust the choice of a CEO.
NongHyup Financial Group Chairman Kim Gwang-soo purchased On-Off Overseas Travelers' Insurance June 12, on the day of its market release.
He became the first customer of the new product that was developed to help improve convenience for frequent overseas travelers.
As the name suggests, the service is “on” automatically when a customer leaves the country and “off” when they return.
This means travelers can have insurance coverage when they are abroad without having to buy products every time they leave the country.
NongHyup Property & Casualty Insurance CEO Oh Byung-kwan
Similarly, NongHyup Property & Casualty Insurance CEO Oh Byung-kwan bought an insurance product that offers broad coverage for serious illnesses including cancer, and cerebrovascular and ischemic heart diseases.
Costs are covered for caregivers and hospitalization. Also eye operations and degenerative arthritis, frequently developed among older people are insured against.
The “cost-effective” plan is optimal for older people, or patients with existing conditions, many of whom are usually shunned by insurers due to the likelihood of large payouts.
Another product Oh purchased covers dementia.
People with advanced Alzheimer's or Parkinson's disease will be given 100 million won ($84,350).
Shinhan Life Insurance CEO Sung Dae-kyu
Shinhan Life Insurance CEO Sung Dae-kyu became a subscriber of its new product whose coverage includes a lump-sum payout to those diagnosed with these major illnesses.
Customers can choose whether to take the lump sum on diagnosis for living expenses, or have it accrue interest income at a rate of 2.75 percent a year.
The CEOs' efforts are part of a broader business strategy to generate greater sources of profit amid declining demand in a market compounded by fierce competition among industry players.
According to the Korea Insurance Development Institute and the Korea Life Insurance Association, 98.4 percent of Korean households were subscribers to insurance plans in 2018, meaning insurers have little room to grow in the domestic market.
Financial Supervisory Service data released in May showed the companies' net profit in the first three months of 2019 dropped to 1.98 trillion won, a 6.2 percent, or 130 billion won, fall from a year earlier.
Non-life insurers were hit particularly hard, with net profit dropping to 718.9 billion won in the January-March period, down 18.4 percent from 880.9 billion won the year before.
The FSS said the worsening performance resulted from an increase in marketing costs amid fierce competition to secure new customers or retain current ones.