Competition between the No. 1 and No. 2 corporations in the domestic funeral plan market, which has surpassed 10 trillion won, is heating up. No. 1 Woongjin Preed Life and No. 2 Boram Group are not only changing strategies but also launching large-scale brand marketing to avoid losing the lead in the fast-growing domestic market since 2020.
According to the Fair Trade Commission, as of Mar. 3, the balance of advance payments in the domestic funeral plan industry reached 10.3348 trillion won. It increased by 60 billion to 90 billion won every year since 2020, and this year it rose by 96 billion won, surpassing 10 trillion won. Funeral plan corporations receive advance payments from subscribing customers and provide future funeral services. The market is expected to grow further in an aging era.
◇Woongjin "No. 1 with an unbridgeable lead" vs. Boram "targeting 20s and 30s with everyday services"
Woongjin Preed Life, the industry leader with about 2.6 trillion won in advance payments, launched a new brand advertising campaign on the 3rd. It is the first brand campaign since the launch of "Woongjin Preed Life" after Woongjin Group's acquisition in Jun. A company official said, "Building on the trust of actor Choi Soo-jong, who has served as Preed Life's advertising model for about 10 years, we intend not only to defend our No. 1 position but also to signal that we will move forward as No. 1 with an unbridgeable lead through the synergy Woongjin and Preed Life will create."
On Aug. 1, Mun Ho-sang, who has served as Preed Life's head of sales and head of the funeral business division, took office as CEO. Mun is currently planning to create new business synergies by combining Woongjin Group's experience operating member-based B2C services with capabilities in education and IT.
Boram Group, the No. 2 player in the funeral plan industry (1.6 trillion won in advance payments), moved to rebrand from its existing "total life care" to "life curator" on the 30th of last month. While its services had focused on major life events such as funerals, weddings, and travel, the plan now is to provide services more closely embedded in customers' daily lives.
To that end, Boram Group has signed business agreements with Shin & Kim LLC, online education specialist corporation MegaStudyEdu, the health checkup platform Good Doctor, and parking specialist corporation Hi Parking, and is expanding various day-to-day services such as legal and accounting, education, and health checkups. A Boram Group official said, "By partnering with various corporations, we will provide tangible value that customers can experience in their daily lives," adding, "We will expand the current customer base, centered on those in their 40s and 50s, to younger people in their 20s and 30s."
Boram Group also selected actors Lee Sung-min and Kang Ha-neul as new advertising models starting on the 1st to secure younger customers, and launched TV commercials.
◇CEOs of the two corporations adopted as audit witnesses: "Advance payments must be managed transparently"
Transparent management of advance payments is a task Woongjin Preed Life and Boram Group must solve for sustainable growth. Of the advance payments that funeral plan corporations receive from subscribers, 50% is deposited with banks or mutual aid associations under the Installment Transactions Act for consumer protection.
The remaining 50% is the problem. There are concerns that funds, excluding the amounts needed to carry out customers' funeral procedures, are not being properly managed. Funeral plan corporations have been operating these funds, including by investing in real estate or financial products.
However, because funeral plan corporations are not financial companies, they are not subject to supervision over financial investments. They are managed by the Fair Trade Commission as prepaid installment traders, and apart from depositing 50% of advance payments, there are no regulations on fund management.
To question these issues, the National Policy Committee of the National Assembly adopted Mun Ho-sang, CEO of Woongjin Preed Life leading the domestic funeral plan industry, and Boram Group Chair Choi Cheol-hong as witnesses for the parliamentary audit.
An aide to Rep. Park Sang-hyuk of the Democratic Party of Korea, a member of the National Policy Committee, said, "Opaque fund management by funeral plan corporations leads to weakened financial soundness and consumer harm," adding, "There are cases where corporations' advance payments are used as a funding source for corporate owners and other related parties, so these problems need to be addressed."
Currently at Boram Group, Chair Choi Cheol-hong has submitted a letter to the National Assembly stating nonattendance for personal reasons, and CEO Oh Joon-oh is reportedly set to appear instead. Mun Ho-sang, CEO of Woongjin Preed Life, is expected to appear as a witness unless there is a clear reason not to.