[1mm Finance Talk] Tongyang Life and ABL Life Board the Woori Ship, Accelerating 'Woori Life' Integration

Tongyang Life and ABL Life Officially Become Woori Financial Group Subsidiaries on July 1
Sung Daekyu Appointed CEO of Tongyang Life, Kwak Heepil Takes Helm at ABL Life
Full-Scale Integration Begins... Labor Union Negotiations Remain a Key Variable

As of this month, Tongyang Life and ABL Life have been officially incorporated into Woori Financial Group. Starting in the second half of the year, these two mid-sized life insurance companies will begin full-scale integration, with plans to relaunch as 'Woori Life' (tentative name), which will become a top-five life insurer in the industry with total assets of 53 trillion won.

According to the financial sector on July 2, Woori Financial Group completed the process of incorporating Tongyang Life and ABL Life as subsidiaries the previous day. Both life insurers have also officially launched under new CEOs. Sung Dae-kyu has become the new CEO of Tongyang Life, while Kwak Hee-pil has taken the top position at ABL Life.

Both CEO Sung and CEO Kwak are considered 'Shinhan men.' After stepping down as head of the Korea Insurance Development Institute in 2019, Sung became CEO of Shinhan Life in the same year and led the acquisition of Orange Life. In 2021, he successfully oversaw the merger of Shinhan Life and Orange Life, serving as the inaugural CEO of the newly integrated Shinhan Life. Since September last year, he has joined Woori Financial Group and led the acquisition team for Tongyang Life and ABL Life. Kwak began his career in 2001 as an insurance planner at the Dogok branch of ING Life, the predecessor of Orange Life, and later served as branch manager, head of sales promotion, and vice president of the sales channel division. At the launch of Shinhan Life in 2021, he served as vice president of the FC1 Business Group, and subsequently became the head of the corporate insurance agency (GA) division at Shinhan Financial Plus, a Shinhan Life subsidiary.

Both CEOs are expected to leverage their experience in integrating life insurers at Shinhan to lead the merger of Tongyang Life and ABL Life. As of the first quarter of this year, Tongyang Life's assets stand at approximately 35 trillion won, while ABL Life's assets amount to 20 trillion won. Once integrated, the combined entity will surpass NH NongHyup Life (assets: 54 trillion won) and approach the scale of Shinhan Life (assets: 60 trillion won), making it the fifth-largest life insurer in the industry and the second-largest among financial holding company-affiliated life insurers.

Woori Financial Group has already begun preliminary work for the integrated corporation. According to Kipris, the patent information search service, Woori Financial Group filed trademark applications for 'Woori Life' and 'Woori Financial Life' on March 12. After Tongyang Life absorbs ABL Life through a merger, it is highly likely that the new entity will adopt one of these names. Workforce restructuring is also underway. In this regard, six executives at Tongyang Life and four at ABL Life were recently dismissed. A Woori Financial Group representative stated, "Our priority will be on capital soundness rather than external growth, and we plan to expand our sales base by developing innovative products and utilizing bancassurance, GA, and digital channels." The representative added, "We will also actively enter new businesses such as healthcare and nursing services, and strengthen connections with non-financial sectors."

However, it is expected to take considerable time before the two life insurers are physically integrated. This is because there are numerous tasks to be completed, such as reorganizing both companies' IT systems to align with Woori Financial Group, integrating insurance and other financial products, and developing a unified branding strategy.

Negotiations between the new management and labor unions also present a major hurdle. The unions of Tongyang Life and ABL Life are currently demanding job security, succession of collective agreements, guarantees of independent management after the acquisition, and severance compensation. In a recent strike vote conducted by the Tongyang Life union, 95.7% of members voted in favor of striking. Until now, Woori Financial Group has maintained the position that these issues would be discussed only after the formal incorporation of the subsidiaries. Now that the process is complete, full-scale talks with the unions are expected to begin. On this day, the Tongyang Life union will hold its first meeting with the new management. An ABL Life representative said, "Now that we are an official subsidiary, we expect active negotiations between the union and management," adding, "Internally, the atmosphere is not particularly confrontational."