Kyobo Life Climbs to Top With Strategy to Cut Risks

Headquarters of Kybo Life in Seoul

By Yoon Ja-young
Staff Reporter

Kyobo Life Insurance employees wondered when they heard a whistle fill the auditorium of the insurer's headquarters in Gwanghwamun, downtown Seoul, last March.

It was Kyobo Life Insurance Chairman Shin Chang-jae who blew the whistle. The former medical professor, who was often spotlighted for special, meaningful events by washing the feet of insurance salespeople or baking cookies for them, blew the whistle to mark beginning of fiscal year 2009.

With the whistle, he meant that all should be as passionate and fully ready like a runner lined up for the start, to mark growth for the year despite difficulties in the global financial market.

The whistle seems to have paid off. Kyobo Life Insurance made a notable achievement despite the global economic crisis.

Kyobo marked 291.6 billion won in net profit in 2008, rising to the top of the life insurance industry. Hence, Moody's, a global credit rating agency, maintained its rating on Kyobo at ``A2,'' while it lowered ratings on numerous financial businesses around the world.

The ``A2'' rating is the highest among Korean financial companies. Kyobo's total assets have breached 50 trillion won, and it has had the highest return on equity (ROE) among the top three players in the life insurance industry here for the past five years.

These accomplishments saw the company win the 2009 Asia Insurance Industry Award, the first Korean life insurance company to do so.

``In the end, risk management paid off,'' a spokesman at Kyobo Life Insurance said. The insurer learned that key for survival is risk management. Kyobo successfully overcome the Asian financial crisis without any government support.

Kyobo Life Insurance stopped overseas investments before September last year when Lehman Brothers collapsed. The thorough risk management enabled it to minimize losses while others faltered.

The insurer set up committees to examine investment and asset management, excluding investment in risky assets from its portfolio. It stuck to its conservative investment principle confined to safe assets that it knows well.

It also focused on non-savings type insurances, which paid off with a good performance. Under the slogan that ``Insurance is love for family,'' the insurer increased sales of whole-life insurance and annuity insurance products.

``Kyobo Life Insurance aims at making good growth of a virtuous circle, in which customer satisfaction leads to increases in sales and profits, and eventually benefiting customers as well as all Kyobo workers and shareholders,'' the spokesman said.