Insurance policies sold through broadcast advertising showed a mis-selling rate three times higher than those sold through other channels, South Korea's Financial Supervisory Service said. The regulator said it would rein in insurance ads that excessively play on consumer anxiety and the desire for compensation, and would draw up measures to improve them.
The FSS said on the 1st that it held a meeting with compliance officers at insurers and home-shopping-affiliated insurance agencies (corporate GAs), together with the Korea Life Insurance Association and the General Insurance Association of Korea, to discuss improvements to certain broadcast ads for insurance products and to shortcomings in consumer protection.
The FSS said it has relied on self-regulation led by the industry associations to stamp out false and exaggerated advertising, but that insurers still tend to repeatedly air sensational spots that prompt impulsive purchases. Some insurers emphasized that policyholders could collect benefits multiple times, or highlighted coverage in bold type while printing the grounds for denying payment in thin, faint lettering, the regulator said. Fear-based marketing was also repeated, including dramatizations of families caring for sick relatives and their grief, and re-enactments of traffic accidents.
Broadcast advertising for insurance products has also surged. Insurance ads aired last year averaged 1,121 spots a day, up 66.9% from 672 in 2024. Total airtime rose 65.2% from a year earlier to 57 hours.
The mis-selling rate for policies sold through broadcast ads was 0.036%, three times the 0.012% rate for other sales channels. The 13th-month persistency rate for such policies was 79.3%, below the 86.3% recorded for other channels. Buyers aged 70 and over accounted for 13.4% of these policies, compared with 7.4% through other channels, indicating a need to overhaul related internal controls, the FSS said.
The regulator said it would support the industry in drawing up concrete implementation plans and cleaning up its own practices. "We will continue to communicate with the industry so that quality broadcast advertising befitting the standing of the insurance industry and the level of consumer awareness can be delivered," an FSS official said.
