Changing Times
A restructuring wave is hitting major life insurance companies hard as seen by Kyobo Life Insurance initiating voluntary retirement on the heels of Samsung Life Insurance and Hanwha Life.
However, small and medium-sized life insurance companies, on the back of their strong performance in the first quarter, are not making specific plans, drawing attention as to whether they will be able to ride out the wave.
Kyobo Life Insurance announced on May 8 that they decided to launch human resource streamlining in a bid to cope with the prolonged low-interest, low-growth trend, and to strengthen corporate competitiveness.
The company, at the end of last year, had let go 40-50 employees by accepting voluntary retirement applications targeting employees with 15-20 years at the company, but the voluntary retirement initiative this time targets all employees (about 4,500 people).
Earlier, Hanwha Life, having decided to downsize for first time in five years, let 300 people go via the job transfer aid and voluntary retirement programs. The reduction accounts for 6.3 percent of the total payroll of 4,738.
Samsung Life Insurance also set out to downsize about 1,000 people via the job transfer aid program, voluntary retirement, and subsidiary transfer.
The big three life insurance companies are concurrently downsizing due to worsening industry profitability stemming from low interest.
While insurance giants are slimming down, small and medium life insurance companies are not showing any signs of restructuring. Mirae Asset Life Insurance and Dongyang Life Insurance said that they have no plans for reorganization. ING Life Insurance, taken over by MBK Partners, is not planning on any revamping either.
An industry associate said, “Small and medium-sized life insurance companies do not have a large payroll, and their first quarter net profits were sound, so there will be no restructuring for the time being.”