Professionals Working as Insurance Consultants

Insurance consultant Jeong Hyun-suk (37) of ING Life’s Gangnam branch in Seoul is a certified public accountant. After becoming a CPA in 2001, he went on to work for an accounting firm and then opened his own office, but in March last year, he stopped working as an accountant and began working at ING Life.

Jeong says, “As financial markets have become complicated and income levels rise, personal asset management has become important. I am challenging myself in the personal consulting field based on my experience in corporate consulting.”

During the Asian financial crisis, the first to be laid off in Korea’s insurance industry were insurance consultants. As bancassurance, which are insurance products sold at banks, were introduced in 2003 and online sales increased, the number of insurance consultants has decreased further.

However, in contrast, foreign insurance companies in Korea are increasing their number of insurance consultants. In particular, companies succeeding with bancassurance are concentrating on increasing the number of consultants who were formerly professionals in other fields.

Foreign Insurance Companies “Catch the Talented Human Resources”-

As of the end of May, the number of consultants in life insurance companies amounted to 136,947, a 9.4 percent drop from 151,096 two years ago. The number of consultants at the three major Korean companies— Samsung, Korea and Kyobo—decreased by three percent, the number at other small to mid sized companies dropped 21.5 percent.

Meanwhile, the four major foreign insurance companies where bancassurance takes up more than half of the total first insurance premium revenue have seen a 31.4 percent increase from 10,578 to 13,904 in the same period.

ING Life saw an increase of 37.5 percent from 3,922 to 5,396, and MetLife 86 percent from 2,154 to 4,007. AIG Life and PCA Life are also hiring more consultants.

The insurance consultants of these companies are clearly distinctive from those of Korean companies. Most of them graduated a four-year university and have at least two to three years of work experience. Though accurate information is not disclosed for privacy reasons, former bank workers, accountants, tax accountants, and even lawyers are being hired as insurance consultants.

Lee Kyoung-woo, head of the training and recruiting team at MetLife, said, “A growing number of professionals such as lawyers are applying to become insurance consultants.”

“High Quality Products Are Sold by High Quality Workers”-

Foreign insurance companies that are enjoying high revenue from bancassurance are striving to increase consultants, their conventional channel for sales, because their major product line is shifting.

As variable insurance and critical illness (CI) insurance gained popularity from 2001, securing professional human resources became the determining factor for the survival of the company. The companies needed workers with financial knowledge as insurance products were connected with stock or bond investments.

The strategy is to sell simple life insurance products online, while products with high premiums and fluctuating profit margins are sold by professionals.

Another reason foreign companies are trying to secure expert workers is that insurance companies are evolving into comprehensive financial consultants that take into consideration the subscriber’s personal income and asset size.

Marketing General Manager Jeong Jae-won of ING Life said, “We provide customized services after identifying the customer’s financial situation and the purpose of the capital.”

An insurance industry insider confided, “One of the reasons that the market share of large Korean insurance companies is decreasing is because they are failing to restructure their existing consultant base to one of professional workers.”

Ki-Jeong Ko koh@donga.com