Year-End Labor Conflicts Expand in the Insurance Industry... Concerns Over Management Struggles in the New Year

Company Split and Job Group Transition Reorganization Initiated
Strong Union Opposition "Intention of Restructuring"

The National Federation of Office and Financial Labor Unions (Chairman Lee Jae-jin) and the Hanwha Life Insurance Labor Union (Chairman Kim Tae-gap) held an emergency press conference for an all-out struggle to block the physical division of Hanwha Life at 2 p.m. on the 18th in front of the Hanwha Financial Center in Yeouido.

[Asia Economy Reporter Oh Hyung-gil] As the year-end approaches, the insurance industry is engulfed in labor-management conflicts. Labor unions have opposed the insurance companies' organizational restructuring efforts through company splits or job group transitions, arguing that these moves could lead to layoffs. With worsening internal and external conditions intensifying management difficulties, ongoing discord between labor and management is expected, signaling a painful start to the new year for insurance companies' operations.

According to the insurance industry on the 28th, the Hanwha Life union notified management that it will go on strike on the 31st of this month and January 4th next year, urging the company to halt its unilateral push for the separation of insurance product manufacturing and sales (separation of manufacturing and sales).

On the 18th, Hanwha Life's extraordinary board meeting approved a plan to physically split its sales organization to establish a subsidiary-type corporate agency (GA) and transfer exclusive agents to this subsidiary-type GA.

The separation of manufacturing and sales is a method already established in advanced insurance markets such as the United States and Europe. It allows insurance companies to specialize in product development while GAs focus on sales, which is advantageous. Consumers can also compare and subscribe to various products.

Yeoseung-joo, CEO of Hanwha Life, recently stated through an internal broadcast, "The newly established sales subsidiary will be able to sell a variety of products, including those from non-life insurance companies, just like existing GAs, thus overcoming the limitations of exclusive channels." He added, "We will create a sales-specialized company with the best competitiveness in Korea by combining differentiated education systems, nurturing systems, and various welfare benefits unique to Hanwha Life."

However, the union fears that this separation of manufacturing and sales will lead to restructuring. They believe the intention is to transfer sales personnel to the subsidiary to carry out restructuring and criticize management for showing no willingness to negotiate during wage collective bargaining. The union estimates that about 1,400 employees are subject to the subsidiary transition.

Before the strike, the union held a vote among its members on whether to take industrial action, which passed with 95% approval. A Hanwha Life official said, "We plan to resolve the issue amicably through dialogue with the union."

[Image source=Yonhap News]

Regular Employees to Contract and Commissioned Positions... "Forced Early Retirement"

Samsung Fire & Marine Insurance is also experiencing stalled labor-management negotiations over the job transition of indefinite contract GA managers. Since November, Samsung Fire has held job transition briefings for GA managers and received job transition applications.

However, the Samsung Fire union opposes the transition of managers from indefinite contracts to special employment insurance solicitors. A union official stated, "If we do not receive proper responses to our demands, we plan to apply for mediation at the Central Labor Relations Commission."

The KB Insurance union also urged an immediate halt to the company's forced early retirement related to the recruitment of GA Frontier branch managers earlier this month. GA Frontier branch managers are a type of entrepreneurial branch manager who are converted to commissioned employees as individual business operators and manage GAs.

A union official said, "They are inducing early retirement through regular personnel transfers for recruitment candidates and threatening personnel retaliation if applications are withdrawn. If the recruitment schedule is not immediately stopped, we are considering strong actions, including blocking the new CEO Kim Ki-hwan's arrival at work."

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