[1mm Finance Talk] Contrasting CEO Appointments at Shinhan Insurance Subsidiaries... 'Qualitative Growth' Takes Priority Over Performance

Jin Okdong Launches Second Term as Chairman
Cheon Sangyoung, Executive Vice President of Shinhan Financial Group, Recommended as New CEO of Shinhan Life Insurance
Kang Byunggwan, CEO of Shinhan EZ Insurance, Recommended for One-Year Extension

The CEO selection process for Shinhan Life and Shinhan EZ Insurance, both insurance subsidiaries of Shinhan Financial Group, has produced contrasting outcomes. Although Shinhan Life achieved its highest-ever performance through the third quarter of this year, its CEO is stepping down, while the CEO of Shinhan EZ Insurance, which saw its losses widen, has been recommended for another term.

According to the financial sector on December 8, Shinhan Financial Group held a subsidiary CEO candidate recommendation committee (hereafter, the committee) on December 5 and newly recommended Cheon Sangyoung, Executive Vice President and CFO of Shinhan Financial Group, as the new president of Shinhan Life. Kang Byungkwan, CEO of Shinhan EZ Insurance, was recommended for a one-year extension.

Cheon Sangyoung, the new CEO candidate of Shinhan Life (left), and Kang Byungkwan, CEO of Shinhan EZ Insurance. Each company

Initially, industry insiders believed that Lee Youngjong, CEO of Shinhan Life, would be reappointed as the head of Shinhan Financial Group's insurance subsidiaries. This was because Shinhan Life posted a record cumulative net profit of 514.5 billion won through the third quarter of this year. CEO Lee, who began his career at Shinhan Bank, contributed to the integration of Shinhan Life and Orange Life and was promoted to Head of Strategic Planning (Executive Vice President) when Shinhan Life was launched in July 2021. In January 2023, he became CEO of Shinhan Life and has maintained the top position in net profit among Shinhan Financial Group's non-banking affiliates.

In contrast, CEO Kang has shown a different performance track record. Kang, who previously worked at Samsung Fire & Marine Insurance, became CEO with the launch of Shinhan EZ Insurance in July 2022. However, during his three-year tenure, the company has not recorded a single profit. While the nature of a digital insurance company can make losses inevitable, there has also been no progress in narrowing the deficit. Shinhan EZ Insurance's cumulative net loss for the third quarter of this year was 27.2 billion won, nearly double the 14 billion won loss recorded during the same period last year. Nevertheless, CEO Kang, after completing the customary '2+1 years' term for Shinhan Financial Group affiliate CEOs, has been granted an additional year.

This personnel decision is interpreted as a glimpse into the blueprint for the second term of Jin Okdong, Chairman of Shinhan Financial Group, who recently secured his reappointment. It suggests an intention to focus more on innovation and strengthening fundamentals rather than solely on visible, numerical achievements. Chairman Jin reinforced this view during a press briefing following the Chairman Candidate Recommendation Committee meeting on December 4, stating that "the most important keyword is qualitative growth" when discussing subsidiary CEO appointments.

The decision to support CEO Kang despite continued losses is seen as recognition of his efforts in building digital insurance infrastructure and advancing IT systems. Since taking office, CEO Kang has significantly upgraded the 13-year-old legacy IT system to a next-generation, cloud-based platform. Leveraging this advanced system, the company diversified its product portfolio and more than doubled insurance revenue compared to the previous year.

Cheon, the candidate recommended as the new head of Shinhan Life, joined Shinhan Bank in 1994 and has served as branch manager at Daelim Jungang, head of global business at Shinhan Card, and head of various departments at Shinhan Financial Group. He is recognized for his deep understanding of the group’s overall business operations and his expertise in finance and accounting, having overseen management operations at the holding company for an extended period. Since last year, he has also served on the board of Shinhan Life, earning high praise from both board members and employees. A committee official stated, "While CEO Lee has driven strong performance and growth, it is now time to pursue qualitative growth through new leadership. We hope that Cheon, with his expertise in finance and management, will further strengthen Shinhan Life."

Cheon, recommended by the committee, and CEO Kang will undergo further qualification and suitability reviews by each affiliate’s executive candidate recommendation committee, before being officially appointed at each company’s general shareholders’ meeting and board of directors meeting.