Life Insurers' Three-Year Policy Persistency Rate Rises 17 Percentage Points in a Year... "Policy Retention as Important as Securing New Contracts"

Life Insurance Big Three All Post Double-Digit Gains in 37th-Payment Persistency Rates
Kyobo Life Leads the Big Three with a 31.9-Percentage-Point Increase
"1,200% Rule" Extended to GA Agents; Commission Payments in Installments Introduced
Long-Term Customer Management Gains Importance Beyond Securing New Policies

Life insurers have significantly improved their medium- to long-term policy persistency rates. With the quality of policies and the management of long-term profitability becoming more important since the introduction of the new accounting standard, IFRS 17, the characteristics of short-pay whole life insurance, which offers higher surrender value rates when policies are maintained for a certain period, are also believed to have contributed. As the financial authorities’ overhaul of the commission system also takes effect, insurers’ ability to retain existing policies and provide after-sales service, in addition to securing new contracts, is emerging as a key factor determining their competitiveness.

Life Insurers Strengthen Medium- to Long-Term Customer Management... Improving Policy Quality

According to disclosure data from the Korea Life Insurance Association on October 11, the life insurance industry’s average three-year (37th-payment) persistency rate was 66.4% in the first half of 2026, up 17.0 percentage points from 49.4% in the same period a year earlier. The two-year (25th-payment) persistency rate also rose by 1.3 percentage points, from 75.8% to 77.1% over the same period. The one-year (13th-payment) persistency rate stood at 88.3%, unchanged from the same period a year earlier.

The policy persistency rate indicates how long a policy remains in force after the customer signs up for insurance. Insurers pay particular attention to the 37th-payment persistency rate because it provides an indication of whether customers maintain their policies over the long term. An industry official explained, "The 37th-payment persistency rate reflects customers’ actual coverage needs, their ability to afford premiums, their satisfaction with products, and the after-sales service they receive. It is used to gauge insurers’ medium- to long-term customer management capabilities and the quality of their policies."

By company, Kyobo Life Insurance recorded the largest improvement in its 37th-payment persistency rate. Its rate was 69.0% in the first half of 2026, up 31.9 percentage points from 37.1% in the same period a year earlier. In the first half of last year, the ranking was Samsung Life Insurance (53.5%), Shinhan Life (52.4%), Hanwha Life Insurance (45.5%), and Kyobo Life Insurance (37.1%). This year, the ranking shifted to Kyobo Life Insurance (69.0%), Hanwha Life Insurance (67.3%), Samsung Life Insurance (66.8%), and Shinhan Life (59.3%). Samsung Life Insurance and Hanwha Life Insurance also posted gains of 13.3 and 21.8 percentage points, respectively, meaning all three of the life insurance industry’s "Big Three" recorded double-digit improvements.

A Kyobo Life Insurance official said, "We have consistently provided after-sales services, including coverage analysis, insurance claim assistance, and policy reviews, with our 'Lifetime Assurance Service' at the center. Through this service, exclusive agents visit customers once or twice a year to review their coverage and help them claim benefits they may have missed." The official added, "Even after a policy is signed, we continue to review customers’ coverage and help them maintain the protection they need over the long term."

Shinhan Life had the highest 25th-payment persistency rate, at 78.5%, followed by Kyobo Life Insurance (78.2%), Samsung Life Insurance (77.0%), and Hanwha Life Insurance (76.5%). For the 13th-payment persistency rate, Hanwha Life Insurance and Kyobo Life Insurance tied at 89.7%, followed by Samsung Life Insurance (88.0%) and Shinhan Life (85.9%).

Expansion of the "1,200% Rule" and Introduction of Commission Payments in Installments... Growing Importance of Long-Term Customer Management

Insurers believe that since the introduction of IFRS 17, maintaining the expected future profits from existing policies in a stable manner has become just as important as the contractual service margin (CSM) secured through new policies. This is because a higher-than-expected increase in policy cancellations could put greater pressure on profitability management. As a result, insurers are increasingly managing medium- to long-term persistency rates and after-sales services as key business indicators.

Analysts say short-pay whole life insurance may also have contributed to the improvement in persistency rates. Sales of short-pay whole life insurance policies with five- or seven-year premium payment periods expanded from 2023. These policies are structured to offer higher surrender value rates once premiums have been fully paid or the policy has been maintained for a specified period. The policies sold at the time have not yet reached the end of their premium payment periods. Customers may consider it advantageous to maintain their policies in order to qualify for higher surrender value rates. However, as policy surrenders could become concentrated around the time those rates increase, insurers are focusing on managing surrender rates and CSM before and after premium payments are completed.

The financial authorities’ planned overhaul of insurance sales rules is also increasing the importance of long-term customer management. Since July 2026, the authorities have expanded the so-called "1,200% rule," which limits first-year recruitment commissions for agents affiliated with corporate insurance agencies (GAs) to no more than 12 times the monthly premium. A system for paying sales commissions in installments is also scheduled to take effect in January 2027. The aim is to split up commissions that were previously concentrated at the beginning of a policy, thereby encouraging policy retention and after-sales service. Although the changes are unlikely to have directly contributed to the improvement in persistency rates in the first half of 2026, industry officials expect them to eventually help shift the insurance sales model from a focus on new policy sales to one centered on policy retention and management.

An industry official said, "As regulatory changes such as the system for paying sales commissions in installments take full effect, the criteria for insurers’ competitiveness will extend beyond the volume of new policy sales to include policy quality, persistency rates, and customer management after a sale." The official added, "How many high-quality policies insurers can secure and manage while keeping them in force over the long term will determine their competitiveness going forward."

This content was produced with the assistance of AI translation services.