Samsung Life Insurance, Industry's First to Exceed Average Employee Salary of 100 Million Won (Comprehensive)

Average Employee Salary Increased by 13% Compared to Previous Year Despite COVID-19

[Asia Economy Reporter Oh Hyung-gil] Samsung Life Insurance employees' average salary has surpassed 100 million KRW for the first time in the insurance industry. Despite the impact of COVID-19 last year, improved performance led some insurers to increase bonuses or grant stock options to boost employee morale.

According to the Financial Supervisory Service's electronic disclosure system on the 16th, Samsung Life Insurance paid a total salary of 566.387 billion KRW to its employees last year. With a total of 5,237 employees, the average salary per person was 107 million KRW. This represents about a 13% increase compared to the previous year's average salary of 94 million KRW.

The average salary for male employees at Samsung Life rose from 112 million KRW to 129 million KRW, while female employees saw an increase from 71 million KRW to 81 million KRW.

As performance improved, bonuses also increased significantly. Samsung Life recorded an annual net profit of 1.266 trillion KRW last year, up 29.5% from the previous year. Insurance profit increased by 15.1% to 1.605 trillion KRW, and the insurance loss ratio slightly rose to 80.0% compared to the previous year. Accordingly, Samsung Life paid employees an average bonus of about 23%.

Samsung Fire & Marine Insurance also saw its employees' average salary rise from 88.17 million KRW in 2019 to 98.93 million KRW last year, an increase of about 10 million KRW. In January, Samsung Fire paid its executives and employees an average of 18% of their annual salary as the 2020 excess profit incentive (OPI). Last year, the average payout for the 2019 excess profit incentive was 12%, so this year's average payout rate increased by 6 percentage points.

Samsung Fire's net profit last year was 766.8 billion KRW, up 25.9% from the previous year. Sales and operating profit also increased by 3.8% and 23.0%, respectively, compared to the previous year.

Samsung Life CEO Jeon Young-mook received 1.15 billion KRW in compensation last year, while Samsung Fire CEO Choi Young-moo received 2.07 billion KRW. CEO Choi's base salary was 754 million KRW, similar to the previous year's 728 million KRW. However, his bonus surged by 80.8% to 1.249 billion KRW from 691 million KRW during the same period.

Holding Strong Despite COVID-19... Insurers Granting Stock Options Emerge

Hanwha Life Insurance also saw a slight increase in average employee salary from 83 million KRW to 86 million KRW. CEO Yeo Seung-joo of Hanwha Life received 800 million KRW in compensation. Hanwha Life recorded a net profit of 196.9 billion KRW last year, a 71.8% increase compared to the previous year.

Stock options have appeared in the insurance industry to boost employee morale. Digital non-life insurer Carrot General Insurance recently decided to grant stock options worth 4.6 billion KRW to key executives and employees. A total of 51 executives and employees, including CEO Jung Young-ho, were granted stock options for 930,000 common shares. The par value per share is 5,000 KRW, totaling 4.65 billion KRW. The exercise period is from February 26, 2023, to February 25, 2027.

However, from 2023, the per-share value must grow more than twice the par value, and from 2024, the pre-tax profit break-even point (BEP) must be achieved to exercise the stock options. Additionally, half of the stock options can be exercised two years after being granted, and the remaining 50% can be exercised in two installments of 25% each at three and four years after the grant date.

An insurance industry official explained, "Although salaries in the insurance industry are not high compared to the financial sector, bonuses have a significant impact. Since the focus is on insurance sales, bonuses vary depending on the department."

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