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

CEO Leadership and Management Skills Put to the Test at KB Insurance and Others

[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 last September, 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 continue. 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 are individual business owners managing 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, incorporated into KB Financial Group last year, also faced conflicts between CEO Min Ki-sik and the sales agent organization. The Field Council, composed of Prudential Life Planners (LPs), staged protests in front of Prudential Life’s headquarters in Gangnam, Seoul, starting last November.

In September last year, Prudential Life consolidated branches to cut costs and improve organizational efficiency, merging 13 out of 76 branches. As some LPs were dismissed during this process and dissatisfaction grew within the sales organization, 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 had 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 sales organizations.

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.

The union of Mirae Asset Life Insurance, which announced plans to establish a subsidiary GA, has also formed an "Emergency Countermeasures Committee to Prevent the Separation of Manufacturing and Sales at Mirae Asset Life" and is planning protests.

An industry insider said, "Both labor and management acknowledge the cost burden caused by the aging workforce in insurance companies," adding, "With the recent issue of separating manufacturing and sales overlapping, conflicts are intensifying not only among sales agents but also among regular employees."

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