According to the insurance industry on June 7, the number of new protection insurance contracts from 22 life insurance companies totaled 2,914,130 from January to March this year, a 3.8% decrease compared to 3,027,898 during the same period last year. The total new contract amount also fell by 12.1%, from 41.227 trillion won to 36.2286 trillion won.
Savings insurance contracts showed a similar trend, with new contracts dropping from 192,608 to 180,165, a decrease of 6.5%. The total amount for these contracts also fell by 6.4%, from 10.6696 trillion won to 9.9831 trillion won.
As a result, the overall number of new personal insurance contracts decreased by 3.9%, totaling 3,094,295, while the total amount shrank from 51.9009 trillion won to 46.2118 trillion won, a decline of 11.0%.
Major life insurance companies have not escaped this downward trend. Hanwha Life's new personal insurance contract amount decreased by 5.4% to 5.3212 trillion won, while Kyobo Life saw a 17.8% drop to 4.7067 trillion won. Samsung Life was the only one among the 'Big Three' to report an increase, with a 6.2% rise to 6.8025 trillion won, although its new contract count fell by 1.0%. Only three of the 22 life insurance companies—Heungkuk Life, MetLife, and BNP Paribas Cardif—reported increases in both the number and amount of new contracts during this period.
Industry experts cite a slowdown in the sales of short-term whole life insurance as a contributing factor to the decline in new contracts. This product, which had driven performance for life insurers in recent years, has seen its growth potential diminish due to regulatory changes aimed at improving product structures, easing competition on refund rates, and reviewing sales practices. Additionally, the economic slowdown has reduced households' capacity for insurance spending, leading to a general decline in new enrollment demand.
If the trend of decreasing new contracts continues, it is expected to pose challenges to the growth of life insurance companies. Given the nature of the insurance industry, new contracts are directly linked to the expansion of future profit sources, known as the insurance contract margin (CSM). A continued decline in new contracts could weaken future revenue generation capabilities. The Korea Insurance Research Institute previously estimated that the CSM for the life insurance sector would decrease by 0.6% this year, from 64.7 trillion won in 2025 to 64.3 trillion won.
An industry official stated, "With high prices and interest rates dampening consumer sentiment, insurance products are inherently difficult for consumers to perceive as necessary. This means that agents must actively reach out to explain and persuade potential clients, making the sales environment increasingly challenging. Particularly, the demand for whole life insurance, once a key product, has diminished due to the rise of single-person households and childless families, making sales even more difficult."
* This article has been translated by AI.
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