"When It Drops Is the Opportunity" Insurance Company Employees Rush to Buy Company Shares

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[Asia Economy Reporter Oh Hyung-gil] Insurance company executives and employees, whose stock prices have been plummeting due to poor earnings, falling interest rates, and the impact of the novel coronavirus disease (COVID-19), have recently attracted attention by consecutively purchasing their own company shares.

This is interpreted as an effort to increase their holdings, gain trust from shareholders by demonstrating commitment to responsible management, and show their determination for a stock price rebound. By purchasing shares at a sharply declined point, they can potentially gain long-term profits if the stock price rebounds.

According to the insurance industry on the 28th, Luo Jianlong, CEO of Dongyang Life Insurance, purchased 7,000 and 1,000 shares of Dongyang Life’s treasury stock on the 23rd and 24th respectively. His holdings increased from 34,193 shares to 42,193 shares.

The timing of CEO Luo’s stock purchases coincided with the stock price dropping from 4,000 won per share at the beginning of the year to around 1,600 won. However, on the 27th, the stock price immediately rebounded, closing at 2,390 won that day.

Yeo Seung-joo, CEO of Hanwha Life Insurance, also purchased 30,000 treasury shares on the market on the 7th. Including previously held shares, CEO Yeo now holds a total of 128,650 shares.

Executive directors Kim Hyun-chul and Hong Jung-pyo, who are registered inside directors, also joined the treasury stock purchases this year, acquiring 36,580 and 21,891 shares respectively. In total, Hanwha Life Insurance executives and employees have purchased about 250,000 treasury shares this year.

Hanwha Life Insurance’s stock price plunged to 895 won on the 23rd but managed a slight rebound to around 1,500 won.

Kang Sung-soo, CEO of Hanwha General Insurance, purchased 72,000 treasury shares over 14 transactions from the 17th to the 24th.

New executives at Samsung Life Insurance and Samsung Fire & Marine Insurance have also started buying treasury shares.

Jeon Young-mook, CEO of Samsung Life Insurance, purchased a total of 6,000 shares in two transactions of 4,000 and 2,000 shares respectively, shortly after being appointed through the board of directors and shareholders’ meeting on the 19th.

Alongside CEO Jeon, Yoo Ho-seok, Vice President (CFO) and inside director, also purchased 3,000 treasury shares.

Choi Young-moo, CEO of Samsung Fire & Marine Insurance, recently purchased treasury shares in two transactions. On the 7th and 12th of last month, he bought 500 and 297 shares respectively, totaling 797 shares. Vice President Jang Deok-hee and Executive Director (CFO) Bae Tae-young also purchased 300 shares each last month.

The companies themselves have also purchased treasury shares.

DB Insurance purchased 3.54 million treasury shares worth 92.5 billion won on the 19th, and Lotte Insurance announced on the 2nd that it purchased treasury shares worth 3 billion won to contribute to the employee stock ownership association.

An insurance industry official said, "This is a good way to show the will to practice shareholder-friendly management and express commitment to responsible management," adding, "Since most insurance stocks have fallen to historic lows, this could be a timing to expect a future rebound."