Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Samsung Life tarnished by misconduct
By Kim Bo-eun
By Kim Bo-eun
Samsung Life CEO Jeon Young-muk
The country's No. 1 life insurer's reputation has been marred by a series of “misconducts,” including refusal to comply with orders by the financial authorities to make payments to claimants. Samsung Life Insurance has also been found to have continued to entrust its investments to its affiliate Samsung Asset Management despite the latter's poor achievements.
In 2018, the Financial Supervisory Service (FSS) directed Samsung Life to provide payments to holders of its cancer policy. The dispute arose after the life insurer stated it could not provide payments for nursing home fees for cancer patients holding its policy, because it did not consider the fees expenses for cancer treatment.
The terms of the policy, however, stated that the insurer would cover expenses for being admitted into an institution for cancer treatment. Because hospitals do not allow cancer patients to be hospitalized after their surgery, the patients need to be admitted to nursing homes for treatment. Samsung is currently involved in a lawsuit filed by policy holders over the case.
Data from the FSS shows that Samsung Life only made 100 percent payments in 62.8 percent of cases it was ordered to last year. This is significantly lower than the figure of other life insurers, which exceeds 90 percent.
Figures for the other two major life insurers Hanwha and Kyobo were 90.9 percent, and 95.5 percent, respectively.
Meanwhile, AIA Life, Mirae Asset Life, Prudential Life, Orange Life and NongHyup Life accepted 100 percent of the financial authorities' orders on payments regarding cancer hospitalization expenses.
Samsung Life's figure is up from 27.2 percent in 2018, but still falls largely short of its competitors.
The insurer's stance is that it will not make the payments unless the top court orders it do to so.
The financial authorities have also taken issue with Samsung Life “unfairly” entrusting the management of its assets to a Samsung Group affiliate.
Contracts with asset managers can be changed or canceled based on performance, but Samsung Life was found to have changed the criteria for assessing the asset managing unit's performance to give it an advantage in evaluation.
Based on its poor performance, Samsung Asset Management had become subject to a reallocation of its managed assets, but Samsung Life allocated its assets to the affiliate after retrieving them.
The FSS has taken measures against the life insurer and is set to soon disclose sanctions on the firm.
Amid the series of “misconducts,” Samsung Life has seen the percentage of foreign investors shrink in the past months.
Foreign investors held over 16 percent of the insurer's shares as of September 2019, but the percentage began to drop from then, falling to below 13 percent in recent weeks.
Samsung Life's share price has also been declining, as the prospects for the life insurance industry remain cloudy amid persisting low interest rates.
The insurer's stock price peaked at 138,500 won in November 2017, but this has steadily fallen over the years, to less than a third of the all-time high at 45,150 won as of closing, Friday.
Samsung Life's net profit for the first quarter of this year saw a sharp fall year-on-year, to 229.9 billion won, a 48.6 percent drop from 447.3 billion in the same quarter of 2019.