Samsung Fire & Marine Insurance, a key player in the non-life insurance market, has exited the bancassurance sector after more than two decades of participation.
The model of bancassurance, where banks serve as channels for selling insurance products, is witnessing a transformation as the company realigns its strategies.
According to the Korea Times, sources close to the matter have indicated that Samsung Fire & Marine Insurance ceased the sale of new long-term insurance offerings via banks as of April 1.
The firm, however, plans to maintain its existing commitments to banking partners and manage the insurance products already distributed. In addition, it is seeking to broaden its market presence abroad, with a particular focus on Vietnam, while monitoring shifts within the industry.
According to the Korea Times, a notable trend impacting the bancassurance channel is the shift in focus from pension and savings-linked insurance products, which have historically comprised a significant portion of bancassurance sales, to protection-oriented insurance products.
This shift is in response to the implementation of the International Financial Reporting Standard (IFRS) 17, which aims to boost service margins – a critical measure of profitability – by encouraging the sale of protection-based insurance. As a consequence, the traditional bancassurance model, which has been largely dependent on savings-based products and the associated bank commissions, is becoming less attractive.
This industry realignment is underscored by the decision of other insurers like Meritz Fire & Marine Insurance and Heungkuk Fire & Marine Insurance to also withdraw from the bancassurance arena.
Conversely, entities such as Hyundai Marine & Fire Insurance, DB Insurance, and KB Insurance are persisting in this space but are reportedly assessing their strategic positions amidst internal discussions.
