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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Despite last year’s warnings and regulatory oversight, aggressive end-of-sale marketing for executive term insurance continues to thrive. Financial authorities have decided to launch an initial investigation into Hanwha Life, which is suspected of particularly intense marketing practices for this product.
On Monday, the Financial Supervisory Service (FSS) revealed the results of its daily monitoring conducted between December 23 and 31, following its regulatory action on executive term insurance across 15 life insurance companies.
According to the FSS, 11 out of 15 insurers (73.3%) continued engaging in end-of-sale marketing, as evidenced by an increase in the number of contracts signed or initial premiums compared to the previous month.
During the monitoring period, the average daily number of contracts signed was 327, reflecting a 7.9% increase from the previous month’s 303. Meanwhile, the average daily initial premium surged by 87.3%, reaching KRW 11.539 billion from KRW 6.162 billion in the prior month.
Hanwha Life, in particular, recorded 644 executive term insurance contracts with an initial premium of KRW 2.252 billion during this period. This accounted for 32.5% of the total sales volume (1,963 contracts, KRW 6.923 billion) across all life insurers. The company’s daily average performance saw a staggering 152.3% increase from the previous month.
In response, the FSS announced a rigorous investigation into Hanwha Life. “We have selected Insurer A (Hanwha Life) and related sales channels as primary inspection targets, and a high-intensity probe will soon commence,” an official stated. “This investigation is an extension of a recent inquiry into the company.”
Executive term insurance is a coverage product designed for businesses to insure CEOs and executives against contingencies such as sudden departures. The FSS halted the sale of this product in December last year. End-of-sale marketing is a strategy that exploits consumer urgency by pressuring them to buy before a set deadline.
The FSS had previously issued a consumer warning about executive term insurance in April last year, followed by an on-site inspection of corporate insurance agencies (GAs) in October. Two months later, in December, the agency enforced regulatory measures on the product’s sales practices.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
