Life Insurers Suffer Drain of Salespeople
By Yoon Ja-young
Staff Reporter
Jeong Mi-eun recently quit her job as a life insurance salesperson and moved to a job at a bank. The insurance company had marked explosive growth during the past few years by focusing on selling variable insurances, which invested part of the insurance money in stocks, but the collapse of the stock market last year made it difficult for Jeong to sell such products.
Jeong is one of the many people who have recently left the life insurance industry. The industry saw salespeople leave, while non-life insurance companies, which fared OK despite global financial crisis, saw the number of their salespeople rise.
The number of life insurance salespeople fell by 5.7 percent to 141,664 in July from a year ago. The number of non-life insurance salespeople, meanwhile, grew 12.3 percent to 85,089.
The firms that focused on variable insurances were hit most. Mirae Asset Life Insurance saw near half of its salespeople leave, and ING Life Insurance had their figure drop by over 20 percent. Tong Yang, Dongbu and Kumho also had an over 10 percent drop, and Korea Life Insurance and Heungkuk saw a near 10 percent plunge.
Some life insurers, however, saw the number of salespeople increase. AIA Life, for example, saw a 25.6 percent increase, and the number of people in sales at Prudential Life Insurance grew by 8.9 percent. Prudential Life explained that it was unaffected by the global financial market turmoil as it focused on selling whole life insurances instead of variable insurances.
Analysts point out that the industry is suffering from the bad practice of recklessly scouting insurance salespeople from other companies. Ways to increase the number of sales is among the top priorities for insurers. They often lure salespeople with huge incentives, but they tend to be ``easy come, easy go'' ― they turn away from the company whenever another insurer offers a better paycheck.
These practices hurt the industry as well as customers. These migratory salespeople often tell their old customers to cancel their insurance products and subscribe to the new company's products. Since cancellation often means a loss for customers, distrust of the life insurance industry has piled up.
``It depends on how one thinks of salespeople,'' said John Kim, a spokesman at Prudential, who doesn't hire people who have worked with other insurance companies. ``Hiring thousands of salespeople would be an easy way to expand business, but we believe that insurance products are too complicated for that. It needs consulting, and the salespeople should be trained to be professionals. This takes time,'' Kim said.
In terms of the size of its sales workforce, Samsung, Korea and Kyobo continued to be the top three players, followed by ING and Mirae Asset.
Non-life insurers, meanwhile, saw an increase in salespeople. Lotte saw the figure grow by 36 percent, and LIG had 2,606 more people join them, growing by 24.9 percent. Samsung Fire and Marine Insurance, the top player in the industry, has 3,586, or near 17 percent more than a year ago.
``Like other insurance companies, we are always conscious about the number of salespeople, how to increase the figure and educate and train them. Last year, however, we didn't make any special efforts to hire more people,'' said a spokesperson at LIG.
He explained, however, that the health insurance boom last year seems to have contributed to the increase. ``Salespeople seem to have headed toward non-life insurers as there were good, competitive products to sell,'' he said.