'Survival' Emphasized at Kyobo Life Insurance Founding Anniversary Ceremony
[Asia Economy Reporter Oh Hyung-gil] Shin Chang-jae, Chairman of Kyobo Life Insurance, stated, "Proud history of the past does not guarantee survival in the future," diagnosing the management environment as 'time zero' and emphasizing a crisis theory.
At the 62nd anniversary ceremony of Kyobo Life Insurance, broadcast nationwide via satellite on the 7th, Chairman Shin said, "As we enter the zero interest rate era, the burden of negative spread on life insurers is increasing," and predicted, "Especially for large companies with a high proportion of high-interest products, financial soundness will continue to decline due to the expansion of negative spread."
He continued, "This year, due to the decline in market interest rates, the deficit in Liability Adequacy Test (LAT) and various guarantee reserves will rapidly increase, causing capital to decrease significantly," adding, "We must also prepare well for the new solvency regime (K-ICS) that the Financial Supervisory Service plans to implement in 2023 in line with the introduction of International Financial Reporting Standards (IFRS 17)."
Chairman Shin also mentioned big tech companies that have rapidly penetrated the financial market and threaten traditional financial companies, saying, "Since the COVID-19 pandemic, non-face-to-face transactions have increased, strengthening the power of big tech companies with strong platforms."
As a solution to overcome the crisis, he emphasized the need to implement 'ambidextrous management' through digital transformation. He argued that financial and insurance industries should be innovated through digital transformation and that new business areas should also be explored.
Chairman Shin said, "To survive rapid market changes and continuously grow, companies must practice ambidextrous management," urging, "With one hand, generate profits through existing life insurance business, and with the other hand, discover future growth engines."
He added, "To conduct ambidextrous sales in the insurance business, we must streamline face-to-face sales methods while pioneering non-face-to-face sales methods for the future," and urged, "In these turbulent times, not only the company but also consultants and employees must become ambidextrous."
Chairman Shin proposed to employees the establishment of a 'two-sided market platform' to discover new business models. A two-sided market platform refers to a platform where both demanders and suppliers actively participate and obtain desired value within the platform.
He emphasized, "Since it is difficult to build a two-sided market platform centered on the insurance business, ideas for such platforms should be found outside the insurance business area in new fields," adding, "The more powerful two-sided market platforms we develop, the higher our position in the market will be."
Chairman Shin concluded, "We must move forward on an unfamiliar path we have never taken before. Sometimes we may fall, but let us steadfastly get up and run again," and said, "If we move beyond familiarity and fear toward the future, Kyobo Life Insurance will become a 100-year company loved by all stakeholders."
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