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Toss Insurance, a subsidiary of Viva Republica, has achieved a significant milestone by surpassing 2,000 agents in just two and a half years since its establishment.  Toss Insurance, a subsidiary of Viva Republica, has achieved a significant milestone by surpassing 2,000 agents in just two and a half years since its establishment. Starting with only two agents in February 2022, the company has grown rapidly without any mergers or acquisitions. This blog post will explore the factors behind Toss Insurance's impressive growth, financial success, and future ambitions. On September 26, 2024, Toss Insurance announced that its number of agents had crossed the 2,000 mark. The company began its operations in February 2022 with just two agents and has grown organically, achieving this milestone without any mergers or acquisitions. The first 500 agents were recruited in just over a year. Following that, the number reached 1,000 in November 2023 and 1,500 in April 2024, now hitting 2,000 in S...

As the U.S. Federal Reserve enacts a significant rate cut, the Bank of Korea faces mounting pressure to follow suit.  As the U.S. Federal Reserve enacts a significant rate cut, the Bank of Korea faces mounting pressure to follow suit. This marks the first potential interest rate decrease since the introduction of the new international accounting standard IFRS 17. This blog explores the implications of this change for the insurance industry, particularly in light of declining investment income. On September 18, the U.S. Federal Reserve implemented a 0.5 percentage point rate cut, reducing the federal funds rate from 5.25-5.50% to 4.75-5.00%. This decision signals the beginning of a rate cut cycle not seen since the emergency measures taken in March 2020 in response to the COVID-19 crisis.  As the Fed moves forward, the Bank of Korea (BOK) is under increasing pressure to lower its interest rates, with its monetary policy meeting scheduled for October 11. Should the BOK proceed w...

The introduction of the new insurance accounting standard, IFRS17, The introduction of the new insurance accounting standard, IFRS17, in the first quarter of 2024 has brought significant changes to the insurance industry. One of the most notable changes is the increased importance of Contractual Service Margin (CSM), which has led to a surge in the influence of General Agencies (GA) that excel in securing high volumes of CSM. As a result, insurance companies have been actively entering the GA market through subsidiaries and equity investments, leading to an overheating market. This blog post explores the background of the GA market overheating following the implementation of IFRS17, the resulting issues, and potential solutions. IFRS17 requires insurance companies to recognize the expected future unrealized profits from insurance contracts as a present value liability, which is gradually amortized and recognized as operating profit over several years. This has made CSM a critical growt...

The rapid growth of General Agencies (GA) in the insurance industry has led many to venture into GA startups The rapid growth of General Agencies (GA) in the insurance industry has led many to venture into GA startups, attracted by the potential for high profitability and entrepreneurial freedom. However, despite the allure, many GA startups face significant challenges and ultimately fail. This blog post will delve into the four common types of GA startups that are more likely to fail and provide insights on how to navigate these pitfalls. 1. The Challenge of Life Insurance Backgrounds One of the significant challenges in GA startups is when founders come from a life insurance background. While life insurance products typically offer higher premiums per contract, they are less advantageous for GAs in the long run. GAs benefit more from non-life insurance products, which may have lower premiums per contract but offer higher commission rates and sustained commission payments over time. A...

erroneous statistics due to a reporting mistake by AIA Life Insurance The recent remarkable performance of variable insurance in the life insurance industry was found to be based on erroneous statistics due to a reporting mistake by AIA Life Insurance. This incident highlights the importance of providing reliable data for both insurance companies and consumers. On the 31st, the insurance industry was shocked by the revelation of errors in the first half of the year’s variable annuity insurance contract numbers. Earlier this month, the Korea Life Insurance Association (KLIA) announced that the total number of new variable annuity insurance contracts in the first half (January to June) was 54,020. However, suspicions arose when the figure for January skyrocketed to 13,756 contracts. The average monthly number of variable annuity insurance contracts in the first half was 9,003, a significant increase compared to last year’s average of 5,047 contracts. This figure suggested that the life ...