As domestic and foreign stock markets continue their rally, interest in variable insurance, which increases insurance payouts and annuity amounts through fund investments, is once again growing. Variable insurance funds managed by insurance companies are classified into overseas investment and domestic investment and are further divided into equity, bond, and mixed types, with equity funds that invest overseas recently dominating the top rankings in revenue over the past year.
Variable insurance is a benefit-sharing product where the subscriber invests directly in a fund with the premiums paid, and the insurance payout varies based on the operating performance. The structure is such that the higher the investment revenue, the larger the insurance payout. One of its advantages is that if a monthly premium of up to 1.5 million won is maintained for more than 10 years, tax benefits are applied.
According to the Life Insurance Association on the 24th, the number of new variable insurance contracts from January to May this year was 55,811, representing a 32.5% increase compared to the same period last year (42,118 contracts). During the same period, the first premium, which is the initial payment made after signing up for the product, increased from 28.4 billion won to 39.5 billion won, a rise of 39%. This indicates that more customers are signing up for variable insurance and contributing larger amounts to their variable insurance accounts.
The reason variable insurance is gaining renewed attention is that domestic and foreign stock markets are currently rising. The KOSPI index recorded a yearly high of 3220.27 on the 22nd. The Standard & Poor's (S&P) 500 index also broke the 6300 mark for the first time on the same day, while the Nasdaq 100 index reached a new high of 20,968.63 for six consecutive trading days.
An industry insider noted, 'The sales of variable insurance are dependent on stock market performance.' He added, 'When the stock market is performing well, variable insurance tends to be more popular, and when the market is not doing well, its popularity declines.' He also remarked that during periods of falling benchmark interest rates, there is increased interest in investment-type products, indicating that variable insurance is receiving more attention as well.
With the favorable winds blowing in the stock market, variable insurance funds are also recording high revenues. According to the Life Insurance Association, the product with the highest revenue in the last year among 200 variable insurance funds with net worths exceeding 100 billion won is Mirae Asset Life Insurance's Global Growth Equity, with a revenue of 30.88%. Expanding the scope to the past three years, it has recorded the highest revenue of 107.92%.
In second place is Mirae Asset Life Insurance's A+ China, which has a revenue of 26.47% over the past year. The third spot also belongs to Mirae Asset Life Insurance's Global IT Software Equity with a revenue of 23.26%. Thus, Mirae Asset Life Insurance's overseas equity funds claimed the top three revenue spots. Additionally, Mirae Asset Life Insurance's Overseas Growth Type ranked fifth with a revenue of 20.26%.
Mirae Asset Life Insurance's variable insurance funds are focused on overseas investments. According to the 'MVP Report' published for variable insurance subscribers in the third quarter of this year by Mirae Asset Life Insurance, the proportions of the main equity portfolios show that 66% is in the United States, while Korea accounts for about 10.7%.
The product with the highest revenue among domestic equity types is Shinhan Life Insurance's Domestic Blue Chip Equity, which recorded a revenue of 20.9%, ranking fourth overall. The remaining products in the sixth to tenth positions are all domestic equity types with revenues ranging from 17.9% to 19.4%. In contrast, bond types recorded poor performance, with the highest revenue at 6.68% (domestic long-term bond type).