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Sep 2019

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South Korea: Non-life insurers hiking marketing fees

Source: Asia Insurance Review | Sep 2019

Major non-life insurers are found to have increased marketing fees to boost market capitalisation, raising concerns that consumers will end up shouldering the costs in the form of increased premiums.
 
The General Insurance Association of Korea indicated that the nation’s 31 non-life insurers spent over a combined KRW7.2tn ($5.9bn) in marketing fees in the first five months of 2019, a 6.4% increase from a year earlier, reported The Korea Times. 
 
The 31 non-life insurers’ average marketing fee rate jumped to 21.5%, an increase of 0.6 percentage points from a year earlier.
 
The fees, spent on landing new subscriptions of insurance products involving pets and dementia, were much-needed as the long-term products will help the firm with steady profit.
 
Competition will become fiercer in the coming months to land as many new customers as possible, ahead of an insurance policy revision which will take effect in January 2021 and cap commissions payable to marketers. A 
 
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