Hanwha Insurance Changed After 2 Years as Management Excellence Award Recipient

Improvement in Car Insurance Loss Ratio
Executive Team Generation Change

Kang Sung-soo, CEO of Hanwha General Insurance

[Asia Economy Reporter Oh Hyung-gil] Hanwha General Insurance, designated as a management supervision target two years ago, is accelerating its business normalization based on its record-breaking performance. There are also expectations that it will be removed from the supervision list as it undertakes a large-scale structural reform.

According to the insurance industry on the 17th, Hanwha General Insurance carried out executive appointments earlier this month, appointing Executive Director Kim Hee-gap as Head of Customer Service and Executive Director Ahn Kwang-jin as Head of Digital Marketing. Starting with the integration of the Deputy Executive Director and Executive Director positions earlier this year, the company completed a generational change in its executive team through successive appointments in April, July, and November.

Hanwha General Insurance continues its strong performance, with significant improvement in the automobile loss ratio, which was previously cited as a deficit factor. The net profit for the third quarter this year reached 168 billion KRW (cumulative basis), an 84.3% increase compared to 91.1 billion KRW in the same period last year. Notably, the company surpassed its highest annual net profit of 149.2 billion KRW recorded in 2017 within just three quarters this year.

The solvency margin ratio (RBC ratio), which indicates the financial soundness of an insurance company, stood at 191.3% as of the third quarter, exceeding the regulatory recommendation of 150%.

Hanwha General Insurance also succeeded in adjusting its portfolio by reducing the proportion of automobile insurance and focusing on general and long-term insurance. The gross written premium for general insurance grew by 10.7% year-on-year, while automobile insurance shrank by 7.9%. The combined ratio, which gauges insurance business profitability, decreased by 1.4 percentage points over the past year to 105.1%.

Its subsidiary, digital insurer Carrot General Insurance, is also showing growth. This month, its flagship product, the Pay-Per-Mile Auto Insurance, surpassed 400,000 cumulative subscriptions, marking a stable foothold. However, it recorded a net loss of 38.4 billion KRW through the third quarter, leaving room for performance improvement.

There is strong anticipation that Hanwha General Insurance will soon be removed from the management supervision target list. Since 2018, the company’s automobile and long-term insurance loss ratios deteriorated significantly, resulting in a 60 billion KRW deficit in 2019. The Financial Supervisory Service conducted a Risk Assessment and Analysis System (RAAS) evaluation of Hanwha General Insurance in August of that year and designated it as a management supervision target in December.

In response, Hanwha General Insurance recruited CEO Kang Sung-soo, former Vice President of Finance at Hanwha Holdings, and tightened its belt by implementing voluntary retirement for employees with over ten years of service over the past two years to improve its structure.

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