Insurance Company Heads Seek Reappointment... Facing Another Crossroads Ahead of Year-End (Update)

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 they are anticipated to 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, Hanwha, and Hana Non-Life Insurance have CEOs whose terms 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 possibility of renewal is considered high. The net income of Nonghyup Non-Life Insurance, which was only 6.8 billion KRW in 2019, increased by 580.9% to 46.3 billion KRW in 2020, the year Choi took office. 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 Insurance, whose term ends in December, is drawing attention as to whether he can secure a third renewal. KB Life Insurance recorded a net loss of 18.1 billion KRW through the third quarter this year, indicating poor performance. However, since he succeeded in a ‘second renewal’ despite last year’s poor results, it is expected that other factors will influence this time as well.

A KB Life Insurance official explained, "Despite the decline in net income, insurance sales are on the rise, indicating long-term growth potential."

Another variable is Prudential Life Insurance, an affiliate. The consensus is that it is difficult to rule out the possibility of renewal considering the ongoing preparations for integration with Prudential Life Insurance, which has not yet been officially announced. CEO Huh previously served as CFO 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 Insurance' Approaching Third Renewal
Renewal Possibilities for 'Kyobo' and 'Hana'

Yoon Yeol-hyun, CEO of Kyobo Life Insurance, 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 Insurance, and the Affinity Consortium has been resolved for now, legal proceedings are still ongoing, making a management change unlikely.

In particular, Yoon’s role in follow-up tasks such as pursuing an initial public offering (IPO) cannot be overlooked. In terms of performance, Kyobo Life Insurance 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 of Hana Financial Group. Since the company turned profitable within a year of his appointment and is transitioning into a digital non-life insurer, renewal is anticipated.

Kang Sung-soo, CEO of Hanwha Non-Life Insurance, whose term ends in February next year, is highly likely to be renewed. The accumulated net profit until the third quarter this year is 168 billion KRW, surpassing last year’s annual net profit of 48.2 billion KRW. The company is moving toward management normalization after being designated as a management supervision target by financial authorities.

Foreign CEOs Luo Jianrong of Dongyang Life Insurance and Xi Ye Zhiqiang of ABL Life Insurance 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.

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

An industry insider said, "As the gradual return to normal life (with-COVID) begins toward 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, overall, there will be no major replacements across the industry."

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