Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Cigna faces backlash for selling LINA to Chubb
LINA Korea's headquarters in Seoul / Courtesy of LINA Korea
By Park Jae-hyuk
By Park Jae-hyuk
Cigna is facing intensifying protest from LINA Korea's executives and employees for its recent decision to sell the life insurer to Chubb, which has Ace Insurance and Chubb Life Korea as its Korean operations.
“Cigna denied rumors several times about its sale of LINA, expressing its intention to continue managing the Korean operation through the announcement of a plan to set up a digital non-life insurance company here,” LINA executives said in a statement, Thursday. “However, it abruptly notified its unilateral decision.”
The executives criticized the U.S. headquarters for not listening to LINA employees about its decision on the amount of bonuses to be paid in compensation for the sale.
“Cigna has yet to inform us of the specifics of the bonuses, welfare and our status after the sale,” a LINA employee told The Korea Times, Friday. “We organized a council to talk with the U.S. headquarters.”
He added that the employees will form a union if they fail to reach an agreement with Cigna.
LINA executives also vowed to protest against the U.S. headquarters if the acquisition deal prevents employees from being paid what they viewed as a fair amount in recognition of their service. The executives called on Cigna to offer a bonus that meets the amount employees are seeking.
Cigna is said to be considering giving 400 percent of the monthly salary to each employee before the deal is finalized and an additional 200 percent a year later, in order to minimize the exodus of its workforce.
LINA staff, however, were not satisfied with the amount, given that the company's net profit last year reached 357.2 billion won ($302 million), the third-largest among life insurers here. The Korean subsidiary of Cigna has also paid 1.1 trillion won to the U.S. headquarters in dividends over the past 10 years.
In addition, the price of LINA accounts for at least 60 percent of the $5.75 billion that Cigna will earn from its latest decision to sell its operations in Korea, Taiwan, Thailand, New Zealand, Hong Kong, Indonesia and Turkey.
The valuation of LINA is even estimated at up to $5 billion, according to some market insiders.