Year-End Labor Disputes Expand in Insurance Industry... Concerns Over Management Struggles in the New Year (Comprehensive)

Company Split and Job Group Transition Organizational Restructuring Begins
Strong Union Opposition "Intent of Restructuring"

The National Federation of Office and Financial Workers' Unions (Chairman Lee Jae-jin) and the Hanwha Life Insurance Labor Union (Chairman Kim Tae-gap) held an urgent press conference for an all-out struggle to block the physical division of Hanwha Life Insurance at 2 p.m. on December 18 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 insurance companies' organizational restructuring efforts through company splits or job category transitions, fearing these moves could lead to workforce downsizing. With worsening internal and external conditions intensifying management difficulties, ongoing discord between labor and management is expected, signaling operational challenges for insurance companies starting in the new year.

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 already established in advanced insurance markets such as the United States and Europe. This approach allows insurance companies to specialize in product development while GAs focus on sales, offering the advantage of enhanced expertise and concentration. Consumers can also compare and subscribe to various products.

Yeoseung-ju, CEO of Hanwha Life, recently stated via internal broadcast, "The newly established sales subsidiary will be able to sell a diverse range of products, including those from non-life insurers, just like existing GAs, thereby 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 programs, and various welfare benefits unique to Hanwha Life."

However, CEO Ye also promised that employee status, salary, and welfare levels would remain unchanged or even improve with the establishment of the subsidiary. He firmly denied any restructuring concerns raised by some parties.

Nonetheless, the union fears that this separation of manufacturing and sales will lead to restructuring. They argue that transferring sales personnel to the subsidiary is intended to facilitate downsizing 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 engage in industrial action, which passed with 95% approval. A Hanwha Life official stated, "We plan to resolve the issue amicably through dialogue with the union."

[Image source=Yonhap News]

Regular Employees to Contract and Commissioned Positions Transition... "Forced Voluntary 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 collected job transition applications.

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

The KB Insurance union also urged an immediate halt to the company's forced voluntary retirement related to the recruitment of GA Frontier branch managers earlier this month. GA Frontier branch managers are converted to commissioned positions as individual entrepreneurs and entrusted with managing GAs, functioning as entrepreneur-type branch managers.

A union official said, "They are inducing voluntary retirement through regular personnel transfers and threatening personnel retaliation when 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 attendance at work."

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