Hanwha Life GA Under Pressure: Allegations of Premium Payments Before IPO

As Hanwha Life Financial Services, a subsidiary of Hanwha Life Insurance, plans to go public in the next two years

As Hanwha Life Financial Services, a subsidiary of Hanwha Life Insurance, plans to go public in the next two years, its GA planners are reportedly under increasing pressure to boost sales. With a target of achieving a company valuation of 1 trillion won this year, the company is tightening its grip on performance. However, there are growing concerns about over-competition and potential consumer harm due to aggressive sales practices.

Increased Sales Pressure and Allegations of Improper Practices

Industry sources indicate that Hanwha Life Financial Services planners are voicing dissatisfaction over the intense sales pressure. A manager in the Seoul region emphasized the importance of profitability for the 2026 IPO, urging planners to focus more on generating revenue. This directive aligns with the broader sales strategy of Hanwha Life, filtering down through regional managers to team leaders and planners.

With the introduction of the new accounting standard IFRS 17, which classifies savings-type insurance as liabilities, insurance companies, including Hanwha Life, are now focusing on selling protection-type insurance products like "The H Whole Life Insurance." However, concerns are mounting over alleged improper or illegal sales practices being overlooked in the pursuit of these goals.

Despite Hanwha Life Financial Services' planners being recognized for high productivity, there are reports of improper sales tactics, such as premium payments on behalf of clients and offering rebates. These practices, while not new, seem to be persisting under the radar, raising ethical and legal concerns.

Persisting Issues and Over-Competition

Industry insiders reveal that GA planners at Hanwha Life Financial Services receive commissions that can reach up to 300%. While customer appreciation events and gifts are common, there are frequent instances where planners share their commissions with clients. This practice is illegal under the Insurance Business Act, which prohibits offering special benefits to clients.

An anonymous planner disclosed that some managers even calculate the cost-benefit of paying premiums on behalf of clients, suggesting that this could be more profitable than having commissions clawed back if a policy is canceled. This persistent issue of premium payments is a longstanding problem in the insurance industry, often leading to unfair competition and consumer harm.

IPO Pressure and Planner Concerns

Hanwha Life Financial Services, the largest GA subsidiary of any domestic insurer, with 22,609 planners as of the end of last year, turned a profit last year with revenues of 1.56 trillion won and a net profit of 68.9 billion won. However, despite this success, many planners are reportedly feeling the strain of increased sales pressure, exacerbated by the company's IPO ambitions.

To meet the listing requirements of the stock market, a company must show a minimum operating profit, ordinary profit, or net profit of 2.5 billion won in the most recent fiscal year, and a total of 5 billion won over the past three years. Failing to maintain profitability could hinder Hanwha Life Financial Services' IPO prospects, further intensifying the pressure on planners.

A company representative acknowledged that premium payments have been a widespread practice in the industry but denied any ongoing improper sales tactics, stating that the company is making efforts to improve internal controls and audits. The representative also dismissed claims of excessive sales pressure as an over-interpretation, emphasizing that planners are simply striving to sell protection-type insurance under the new accounting rules.

As Hanwha Life Financial Services gears up for its IPO, the company and its planners face significant challenges and pressures. While striving for profitability is crucial, it is equally important to ensure ethical sales practices and prevent consumer harm. The industry and regulators must work together to address these issues and promote a fair and transparent market environment.