Insurance Company CEO Faces 'Labor-Management Conflict' Challenge from the Start of the Year

KB Sonbo, Prudential Life, and Others Face Prolonged Conflict
CEO Leadership and Management Skills Put to the Test

[Asia Economy Reporter Oh Hyung-gil] As labor-management conflicts spread in the insurance industry, the management capabilities of CEOs have come under scrutiny. With the insurance market saturated and growth slowing, they face the challenge of restructuring the workforce while having to persuade employees who fear downsizing.

According to the insurance industry on the 11th, Kim Ki-hwan, the newly appointed CEO of KB Insurance this year, had a rough start from his first day at work. On the 4th, the KB Insurance labor union occupied the executive office and launched a protest to block Kim’s arrival, demanding resolution of issues related to broken trust in collective bargaining and organizational restructuring.

Kim stated, "I have been briefed on the issues that arose during the collective bargaining negotiations and will provide a response and resolve them as soon as possible." He added, "I fully empathize with the problems related to personnel appointments and will sit down with the union to discuss the wage peak system and other issues," proposing persuasion and dialogue.

According to the KB Insurance union, during collective bargaining in September last year, they agreed on an additional payment rate of 50% (based on bonuses) if the annual net profit exceeded 180 billion KRW. The union claims that immediately after the agreement, the company notified them that achieving the 180 billion KRW net profit target would be difficult due to a 26.7 billion KRW loss from investments in U.S. hotels and retail buildings.

Conflicts stemming from the organizational restructuring pushed at the end of last year are also ongoing. The union opposes the company’s attempt to induce voluntary retirement by introducing the GA Frontier branch manager system, which replaces regular employees with commissioned agents who manage agencies. The KB union plans to hold a nationwide branch meeting on the 12th to share the current situation and gather opinions on future actions.

Prudential Life Insurance, which was incorporated into KB Financial Group last year, is also experiencing prolonged conflicts between CEO Min Ki-sik and the sales agent organization. The Field Council, composed of Prudential Life Planners (LPs), has been protesting in front of Prudential Life’s headquarters in Gangnam, Seoul since November.

In September last year, Prudential Life consolidated branches to reduce costs and improve organizational efficiency, merging 13 out of 76 branches. As dissatisfaction grew among the sales organization due to some LPs being dismissed during this process, the Field Council repeatedly requested meetings with management, but the company refused, escalating the conflict.

Prudential Life is known in the insurance industry as a "military academy" because its LPs are highly professional and capable, with many long-term employees. How to embrace these highly proud LPs has emerged as a key issue.

Hanwha Life, which announced the launch of a specialized insurance sales subsidiary, has formed a labor-management task force (TF) to discuss all pending issues, including the separation of the sales organization.

After the Hanwha Life union conducted warning strikes on December 31 and January 4, CEO Yeo Seung-joo resolved the situation by firmly assuring employees that their status, salary, and welfare benefits would remain unchanged with the establishment of the subsidiary and drawing a clear line against any restructuring.

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