ABL Life, which was brought under Woori Financial Group, is expanding the scale of ABA Financial Service, a corporate agency (GA; General Agency) subsidiary. As the insurance industry reorganizes around large GAs, the company is preparing to jump into full-fledged competition.
According to the insurance industry on the 17th, ABL Life on the 3rd approved a plan to change its 100% subsidiary, ABA Financial Service, from a limited liability company to a joint-stock company. It created new articles of incorporation for a joint-stock company and appointed directors and an auditor. An ABL Life official said, "ABA Financial Service's business scale has expanded. As ABL Life was brought under a financial holding company, we believed a professional governance structure and transparency were needed, so we changed it to a joint-stock company."
ABL Life established ABA Financial Service in Jan. 2019 by contributing 100% of its capital. In Oct., it additionally injected 14.2 billion won into ABA Financial Service. ABA Financial Service expanded its scale by acquiring the business institutional sector of ABC Life, a small GA, in Jul.
ABA Financial Service turned to profit in 2022 and posted a net profit of 1 billion won in the first half of this year. New contracts increased from 49,435 in 2023 to 58,428 the following year, and during the same period, commission revenue rose 21% from 37.1 billion won to 44.9 billion won. New contracts in the first half of this year totaled 36,147.
ABA Financial Service plans to increase its agents to more than 2,000. In the insurance industry, agencies with 3,000 or more agents are classified as extra-large GAs, and those with 500 or more as large GAs. The number of ABA Financial Service agents rose from 684 at the end of the first half of last year to 973 at the end of the first half of this year, an increase of more than 300 in one year.
Insurers are moving to strengthen corporate GAs. Since the separation of product manufacturing and sales, known as "manufacturing-sales separation," corporate GAs have gained influence. Hanwha Life separated its captive sales organization entirely to establish Hanwha Life Financial Service. Afterward, ABL Life, Mirae Asset Life Insurance, KB Life, and Heungkuk Life also adopted corporate GAs.
ABL Life is prioritizing profitability improvement by strengthening not only its GA channel but also its captive agent channel. After being brought under Woori Financial Group, ABL Life CEO Gwak Hee-pil, a former agent who once served as a GA chief, is regarded as a sales expert. ABL Life recorded a net profit of 83.8 billion won from January to September this year, up 18.2% from the same period last year.