Solidifying the Top Four GA System in Insurance… Over 60,000 Affiliated Agents

the top four GA system is solidifying, with the number of affiliated agents exceeding 60,000.

As the separation of product manufacturing and sales in the insurance industry becomes more active, the status of corporate insurance agencies (GAs) is rising. Among these, the top four GA system is solidifying, with the number of affiliated agents exceeding 60,000. This article delves into the current state of the GA industry, the achievements of major companies, the response of financial authorities, and future prospects.

The insurance industry is experiencing a surge in the separation of product manufacturing and sales, significantly enhancing the influence of corporate insurance agencies (GAs). Particularly, the top four GA system is becoming more established, with the number of affiliated insurance agents surpassing 60,000.

In June 2023, Hanwha Financial Service, the number one GA in the industry, issued overseas bonds worth 50 billion won, marking the first such issuance in the GA industry and achieving an 'A+ corporate credit rating.' Additionally, since its inception in April 2021, Hanwha Financial Service has seen a continuous increase in the number of agents, reaching 22,609 in 2023. The company also reported a net profit of 13.8 billion won in the first quarter of 2023, successfully turning a profit.

GA Korea, the second-largest GA, along with INKA Financial Service and Global Financial Sales, ranked third and fourth respectively, are also expanding their number of agents and strengthening their business fundamentals. In the first quarter of 2023, GA Korea recorded combined life and non-life insurance sales of 26.2 billion won, a 54.1% increase from the previous year. INKA Financial Service, which went public two years ago, surpassed a market capitalization of 300 billion won and achieved a net profit of 29.5 billion won last year. Global Financial Sales has maintained its number of agents and consistently increased its new contracts.

This growth has naturally drawn the attention of financial authorities. The Financial Supervisory Service recently held a meeting with over 20 GAs to hear their current issues and announced plans for frequent inspections to address market disturbances. Additionally, the Financial Services Commission launched the 'Insurance Reform Conference' in May this year to discuss measures to improve the sales practices of GAs and prevent excessive competition.

The growth of the GA industry has also led to an increase in the market share of large GAs. As of 2023, the number of insurance agents affiliated with large GAs has increased to 198,517, with new contracts totaling 16.31 million. This indicates a significant increase in the market share of large GAs within the overall GA market.

However, there are concerns about the oligopolistic and imperfect competition structure of the GA market. The concentration of insurance agents in a few large GAs poses a risk of small GAs being pushed out of the competition. Consequently, the GA industry is likely to continue its trend towards further consolidation and concentration.

The active separation of product manufacturing and sales in the insurance industry is boosting the influence of the GA sector. The solidification of the top four GA system and the growth of large GAs are positioning the GA industry as a major insurance sales channel. However, amidst this growth, concerns about the imperfect competition structure and oligopolistic nature of the market persist. Cooperation between financial authorities and the industry is essential to foster the healthy development of the GA market. It is crucial to create an environment where GAs can provide reliable and objective information to consumers.