[Reporter’s Notebook] Values the MG Insurance Union Should Prioritize Over Job Security

MG Insurance Faces Risk of Blue House Intervention and Bankruptcy
1.24 Million Policyholders Fear Contract Termination
Union Demands Full Job Security by Holding Policyholders Hostage
Trust in Protecting Policyholders Must Come Before Job Security

"I should have just put it in a big company, but my friend kept asking me to get insurance from his company, so I helped him, and now I'm considered unfilial."

Recently, dozens of MG Insurance policyholders sent reports to the reporter via email. They feared that their insurance contracts might be voided as the prolonged sale of MG Insurance increased the possibility of bankruptcy or liquidation. One policyholder said that decades ago, at the request of an acquaintance, he enrolled his father as the insured in a health insurance policy. He pleaded with the government to raise their voices, saying that if the insurance is forcibly canceled, it would be difficult for his father, who has pre-existing conditions, to re-enroll, and they would not be able to afford the huge medical expenses.

The number of MG Insurance policyholders reaches 1.24 million. Despite difficult financial situations, they have faithfully paid premiums for 20 years because they believed that MG Insurance would provide the promised coverage to help when misfortune struck their families due to illness or injury. However, during the sale process, it was hard to find trust?the foundation of an insurance company's existence?in the behavior shown by MG Insurance's management and labor union. Instead, their collective selfishness, trying to guarantee their own job security by holding policyholders hostage, was clear.

MG Insurance has posted losses for four consecutive years since 2020. The accumulated losses have eroded capital, resulting in a complete capital erosion of -18.4 billion KRW as of the end of the third quarter last year. The management and employees represented by the labor union, who lead the company, bear unlimited responsibility for the company's management status. If the company is well-managed and solid, they can claim 100% job security during the acquisition process. However, if the situation is so dire that it is designated as a distressed financial institution, that justification is weak. Nevertheless, MG Insurance's labor union strongly pushed for 'job security for all employees,' and ultimately Meritz Fire & Marine Insurance gave up on acquiring MG Insurance after three months.

The MG Insurance labor union has maintained the stance that 'bankruptcy is better than being acquired by Meritz Fire & Marine Insurance.' This essentially means they do not care if the insurance contracts of 1.24 million policyholders are forcibly canceled if their job security is not guaranteed. At a press conference held in front of the Korea Deposit Insurance Corporation on the 17th, they urged financial authorities to ensure a normal sale, claiming the justification of protecting the labor rights of all members as well as safeguarding 1.24 million customers. This is a cunning strategy equating 'job security = policyholder protection.' With such an attitude, even if the company is normalized later, there will likely be few customers who trust MG Insurance and purchase insurance.

There is not much time left for MG Insurance. Now, the MG Insurance labor union must show trust by pledging to keep the contracts promised to policyholders even if they largely give up their job security. This is necessary not only for individual policyholders but also to maintain the soundness of the insurance market. If MG Insurance goes bankrupt or liquidates and all insurance contracts are canceled, future insurance buyers will likely only seek products from large insurers. This would lead to the elimination of small and medium insurers and the disappearance of diversity in the insurance market. The MG Insurance labor union and management need to reconsider what truly is the way to save the company.