Aplus Asset: Hidden Success Behind Life Insurance Boom in Non-Life Insurance Sales

Aplus Asset Advisor (Aplus Asset), a listed General Agency (GA), has shown remarkable growth in its first-half performance, with its operating profit nearly tripling.

Aplus Asset Advisor (Aplus Asset), a listed General Agency (GA), has shown remarkable growth in its first-half performance, with its operating profit nearly tripling. This growth is attributed to a special boom in the life insurance market, driven by intense competition among insurers to sell short-term whole life insurance. However, Aplus Asset's performance in non-life insurance sales has also shown significant growth, proving its competitiveness in the market. This blog post will delve into the factors behind Aplus Asset's success and its future outlook.

Life Insurance Boom and Non-Life Insurance Success

Aplus Asset achieved significant growth in its operating profit in the first half of this year, nearly tripling compared to the same period last year. While this impressive result was largely due to a special boom in the life insurance market driven by fierce competition among insurers to sell short-term whole life insurance, the company's non-life insurance sales performance also contributed significantly with double-digit growth. Given that the company's management strategy for the year focused on increasing non-life insurance and third-party insurance sales, this outcome is highly satisfactory.

In the second quarter of 2024, Aplus Asset recorded 113.5 billion KRW in revenue and 10.2 billion KRW in operating profit, representing a year-on-year increase of 29.5% in revenue and 220.8% in operating profit. On a half-year basis, the company achieved 236.4 billion KRW in revenue and 16.1 billion KRW in operating profit, reflecting growth rates of 43.8% and 198.3%, respectively, compared to the first half of last year.

Balanced Growth in Life and Non-Life Insurance Sales

A breakdown of Aplus Asset’s insurance fee revenue for the first half of the year reveals that life insurance fees amounted to 104 billion KRW, accounting for 44% of total revenue, while non-life insurance fees reached 108.2 billion KRW, or 45.8% of total revenue. The remaining 10.2% came from the company's subsidiaries, such as Aplus Life, a funeral service company, and Aplus Realty, a real estate asset management company.

While non-life insurance fees slightly exceeded life insurance fees, in terms of pure sales performance (excluding renewal fees), life insurance premiums were higher, with 13 billion KRW compared to 11.2 billion KRW for non-life insurance. Life insurance sales grew by 52.2% year-on-year, while non-life insurance sales increased by 16.2%. The surge in life insurance sales can be attributed to insurers' aggressive efforts to secure the CSM (Contractual Service Margin) by promoting long-term whole life insurance policies, particularly those with short premium payment periods of 5 to 7 years.

New Management Strategy Paying Off

To strengthen its competitiveness in the non-life insurance sector, Aplus Asset implemented a new management strategy and appointed Hwang Seung-mok, a former executive from Samsung Fire & Marine Insurance, as CEO at the end of last year. This move has already proven effective, as the company's non-life insurance sales continue to grow steadily. Despite being overshadowed by the rapid growth in life insurance sales, the growth in non-life insurance sales has also significantly contributed to overall performance improvement, reflecting the success of the new management strategy and leadership from the outset.

Continued Growth Potential

As of the end of the first half of this year, Aplus Asset had 5,163 agents, representing a 10.8% increase compared to the end of 2023. With this growth, Aplus Asset has become the 11th largest GA with over 5,000 agents, joining the ranks of major GAs. Considering that the number of agents is a key factor in a GA's sales competitiveness, Aplus Asset's growth trajectory is expected to continue for the foreseeable future.

Aplus Asset has achieved impressive performance in both life and non-life insurance sales, recording strong results in the first half of this year. With its new management strategy already showing results in its first year, Aplus Asset appears poised for sustained growth in the coming years. We look forward to seeing how the company continues to evolve and expand in the future.