Hyundai Marine & Fire CEO Jo Yong-il and Lee Seong-jae 'Two Tops'... Forecasting 3% Growth (Comprehensive)

Sales Target Set at 13.7725 Trillion Won
Highest Figure in 3 Years 'Ambition'

CEO Generation Change in 7 Years
Leading After the General Meeting on the 20th

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Hyundai Marine & Fire Insurance, which chose a 'generation change of the Chief Executive Officer (CEO),' has set a goal of '3% growth' this year and announced aggressive sales plans. Although the insurance industry is sluggish and the loss ratios of core business sectors such as automobile insurance and indemnity medical insurance are declining, the company plans to lay the groundwork for growth amid the crisis.

According to the insurance industry on the 4th, Hyundai Marine & Fire Insurance presented a sales target (gross written premium) of 13.7725 trillion KRW in the corporate governance annual report released at the end of last month. This is a 3.0% increase compared to the previous year's target of 13.3626 trillion KRW, marking the highest figure in the past three years.

Hyundai Marine & Fire Insurance set a target of 13.002 trillion KRW in 2018, but actual sales that year amounted to 12.9783 trillion KRW. Last year, it achieved sales of 13.4174 trillion KRW, slightly exceeding the target.

This year, the net business expenses are also budgeted at 2.6399 trillion KRW, a 3.2% increase from 2.5573 trillion KRW last year. Since business expenses are directly linked to performance, this is interpreted as a commitment to achieving results.

The management policy for this year was also set to pursue solid growth based on profits to overcome the difficult management environment, including the slowdown in the domestic insurance industry's growth and deteriorating profitability, and to lead the market by strengthening sales competitiveness.

In particular, the company plans to actively respond to digital transformation and secure future growth engines. Hyundai Marine & Fire Insurance showed its determination to recover performance through a swift organizational restructuring starting at the end of last year. In November last year, the company upgraded the Digital Strategy Department to the Digital Strategy Headquarters to strengthen digital capabilities.

To promote solid growth, the company will also focus on managing loss ratios. In fact, Hyundai Marine & Fire Insurance's loss ratio increased from 85.2% in the first quarter of last year to 86.3% in the second quarter and 87.7% in the third quarter. In the fourth quarter, it surged to 90.2%.

The company plans to focus on crisis management for automobile insurance and indemnity insurance. Last year, Hyundai Marine & Fire Insurance's combined ratio for automobile insurance was 110%, up 5.2 percentage points from 104.8% the previous year. The combined ratio is the sum of the loss ratio and expense ratio, and exceeding 100% means that losses and expenses exceed premium income. The risk loss ratio for long-term insurance such as indemnity also worsened by 8.1 percentage points to 96.7% from 88.5% the previous year.

At the shareholders' meeting on the 20th, the newly appointed General President Jo Yong-il and Vice President Lee Sung-jae will face the challenge of achieving both 'solid performance and growth.'

Under the new co-CEO system, President Jo will be responsible for overall sales strategy formulation and channel-specific strategic planning, while Vice President Lee will handle management planning and be expected to establish a mid- to long-term growth foundation by introducing digital new technologies and pioneering overseas new business markets.

President Jo was born in 1958, graduated from Gyeongbuk High School and Seoul National University with a degree in English Language and Literature, and joined Hyundai Construction in 1984. He moved to Hyundai Marine & Fire Insurance in 1988 and served as head of corporate sales support, executive director of general insurance business, executive director and vice president of corporate insurance division, and Chief Operating Officer (COO).

Vice President Lee was born in 1960, graduated from Seoul High School and Sogang University with a degree in Economics. He served as head of marine business, head of SOC public enterprises, managing director of corporate sales, head of management planning, head of overseas business division at Hyundai Marine & Fire Insurance, and CEO of Hyundai C&R. He returned to Hyundai Marine & Fire Insurance as head of corporate insurance division in 2018 and was promoted to vice president last year.

A Hyundai Marine & Fire Insurance official said, "Although a difficult management environment is expected to continue this year, there are positive aspects such as market competition shrinking due to commission declines since the end of last year. While the loss ratio for long-term insurance is expected to rise compared to last year, the increase in high-quality coverage such as death benefits and the effect of increased earned premiums in automobile insurance will reduce the loss ratio, improving the operating deficit."

Lee Sang-jae, Vice President of Hyundai Marine & Fire Insurance Photo by Yonhap News

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