Korean life insurers suffer 20% drop in new contracts

The number of new contracts dropped an average 20 percent in April from the previous month for South Korea’s 24 life insurance companies, industry records showed Monday, a sign that contraction in domestic consumption from a ferry disaster may be even more severe than feared.

Hana HSBC Life Insurance Co. logged 472 million won ($460,000) in first-month premium in April, sharply down 75.9 percent from 1.95 billion won tallied in March.

Woori Aviva Life Insurance Co.’s first-month premium plunged 48.6 percent on-month to 721 million won last month from 1.41 billion won a month earlier, while NongHyup Life Insurance Co. saw a 46.3 percent drop on-month to 15 billion won from 28 billion won over the cited period.

The first-month premium measures the number of new insurance contracts, as making the first payment is the final step in completing an enrollment. Market watchers say the decline is largely from the 33.5 percent fall in the sale of bancassurance products.

Nonghyup Life posted a 53.1 percent on-month drop in bancassurance sales, while industry leader Samsung Life Insurance Co. also recorded some 13 percent decrease in selling bank-partnership insurance products. (Yonhap)