Change or Stability... The Year-End Fate of Insurance Company Chiefs' Reappointment?

Record-Breaking Performance Expectations Rise
2023 IFRS17 Response Challenges

[Asia Economy Reporter Oh Hyung-gil] As the year-end approaches, insurance companies are showing signs of rushing to carry out personnel changes, drawing attention to whether CEOs nearing the end of their terms will be renewed. Although the impact of COVID-19 has not fully subsided, record-breaking performance is expected again this year, so it is anticipated that they will receive satisfactory management results.

With the introduction of the new International Financial Reporting Standard (IFRS 17) in 2023, there is growing speculation that companies will choose stability over change. However, CEOs who have already been renewed or whose performance has deteriorated face relatively uncertain futures.

According to the insurance industry on the 8th, Kyobo, Dongyang, KB, ABL Life, NH Nonghyup, and Hana Non-Life Insurance are among those whose CEO terms will expire between next month and March of next year.

Choi Chang-soo, CEO of NH Nonghyup Non-Life Insurance, who took office in January last year, is expected to have his renewal decided by the end of this year. Since he successfully improved profitability and restructured the company, the likelihood of renewal is considered high. Nonghyup Non-Life Insurance’s net income, which was only 6.8 billion KRW in 2019, recorded 46.3 billion KRW in 2020, the year Choi took office, marking a 580.9% increase in just one year. This year, net income reached 87.6 billion KRW by the third quarter, up 78.2% (38.4 billion KRW) compared to 49.2 billion KRW in the same period last year.

Huh Jung-soo, CEO of KB Life, whose term ends this December, is under scrutiny to see if he can secure a third renewal. KB Life recorded a net loss of 18.1 billion KRW through the third quarter this year, indicating poor performance. Despite last year’s poor results, he succeeded in a ‘second renewal,’ so there is speculation that other factors may influence this time as well.

A variable is Prudential Life, an affiliate company. Considering the ongoing preparations for integration with Prudential Life, which has not yet been officially announced, it is generally agreed that the possibility of renewal cannot be ruled out. Huh previously served as the Chief Financial Officer of KB Financial Group and led the integration process during the acquisition of Hyundai Securities and LIG Non-Life Insurance.

'NH Nonghyup Non-Life Insurance' Restructuring
'KB Life' Approaching Third Renewal
Renewal Possibilities for 'Kyobo' and 'Hana'

Yoon Yeol-hyun, CEO of Kyobo Life, whose term expires in March next year, is expected to be renewed without major surprises. Although the conflict over the put option with Shin Chang-jae, Chairman of Kyobo Life, and the Affinity Consortium has been resolved for now, legal proceedings are still ongoing, so the likelihood of management changes is low.

In particular, Yoon’s role in subsequent tasks such as pursuing an initial public offering (IPO) cannot be overlooked. In terms of performance, Kyobo Life achieved a net profit of 610.4 billion KRW in the first half of this year, a 40% increase compared to the same period last year, maintaining stable growth.

Kwon Tae-gyun, CEO of Hana Non-Life Insurance, whose term ends in March next year, is expected to have his future decided in the year-end regular personnel reshuffle at Hana Financial Group. Having turned profitable within one year of taking office and transitioning into a digital non-life insurer, renewal is anticipated.

Foreign CEOs Luo Jianrong of Dongyang Life and Xi Yezhiang of ABL Life are also expected to be renewed, but the sale of major shareholders in China is a variable. Chinese financial authorities announced the public sale of Dajia Insurance, the major shareholder of both companies, but no buyers have emerged yet.

In the insurance industry, a series of renewals has continued this year. Earlier this year, Choi Young-moo of Samsung Fire & Marine Insurance, Yeo Seung-joo of Hanwha Life, and Byun Jae-sang of Mirae Asset Life succeeded in renewing their terms. Last month, Lee Jae-won of Fubon Hyundai Life and Jo Ji-eun of LINA Life were also renewed.

An industry insider said, "As the gradual return to normal life (With-Corona) begins ahead of the year-end and preparations for IFRS 17 introduction next year are underway, the insurance environment is rapidly changing. While some insurers may have internal demands for generational change, there will be no major replacements across the industry overall."

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