Life insurers ramp up accident insurance sales through GA channels as first-year premiums jump 30%

Life insurance companies aggressively expanded their accident insurance sales through general agencies, or GA, in the first half of this year, data showed. Industry observers attributed the trend to a two-pronged strategy: a sector-wide push to rebuild product portfolios as demand for whole-life insurance wanes, and a sales drive to increase the share of protection-type products, which are rated more profitable under the new IFRS 17 accounting regime.

According to the Insurance Development Institute's monthly insurance statistics, first-year premiums collected by life insurers through GA channels for accident insurance totaled about 12.2 billion won ($9 million) in the first half of this year, up 30.9 percent from about 9.3 billion won in the same period last year. First-year premiums — the initial payment made by a policyholder upon signing a new contract — serve as a key indicator of new policy sales performance.

Particularly notable was the surge in GA sales of no-refund and reduced-refund accident insurance products, which offer lower premiums in exchange for reduced or eliminated surrender values. First-year premiums for such products sold through GA channels jumped from 96.71 million won in the first half of last year to 5.2 billion won this year. Over the same period, GA sales of standard accident insurance fell from 9.2 billion won to 6.98 billion won, signaling a clear shift in sales momentum toward no-refund products.

By company, Mirae Asset Life Insurance posted the largest absolute increase, with GA accident insurance first-year premiums rising 59 percent from 3.4 billion won to 5.42 billion won. Heungkuk Life Insurance also saw a 58 percent gain, climbing from 1.77 billion won to 2.8 billion won, with no-refund products accounting for 2.02 billion won of that total. Hanwha Life Insurance grew its sales from 32 million won to 390 million won. Lina Life Insurance cut standard product sales from 4.03 billion won to 530 million won while expanding no-refund sales to 3.04 billion won.

The industry-wide first-year premium figure for no-refund accident insurance, however, plunged from 210.5 billion won to 5.8 billion won. The drop reflects the absence of a one-time 198.8 billion won bancassurance sale made by Fubon Hyundai Life Insurance through bank branches in the first half of last year. Stripping out that anomaly, accident insurance sales among life insurers have actually expanded, driven primarily by the GA channel.

The push into accident insurance is rooted in intensifying competition between life and non-life insurers over the so-called third-sector insurance market — covering illness, injury and long-term care. As single- and two-person households grow more common and consumers increasingly prioritize their own health and retirement over family protection, demand for whole-life insurance, long the flagship product of life insurers, has steadily declined. In response, life insurers have been moving into illness, accident and care coverage, a space traditionally dominated by non-life insurers.

The introduction of the new accounting regime has reinforced this shift. Under IFRS 17, the contractual service margin — the expected future profit embedded in insurance contracts — has become a central metric, and protection products carry significantly higher margins than savings products. Life insurers with weaker captive agent networks appear particularly reliant on GA channels to drive sales.

"The boundary between life and non-life insurance has collapsed, and whole-life products no longer generate meaningful margins," one life insurance industry official said. "Ultimately, the market will have no choice but to compete in the space where both sides sell together — illness, accident and care." Another industry official said savings products such as variable insurance contribute relatively little to company earnings even when premiums are the same, while protection products carry higher margins. "For life insurers without a captive channel, GA-driven sales will only grow from here," the official said.