Jun Ji-hye, a reporter at the finance desk of The Korea Times, focuses primarily on economic policy and government agencies, mainly covering the Ministry of Finance and Economy, the Ministry of Budget and Planning, the National Tax Service and the Korea Customs Service. She previously covered financial authorities, including the Financial Services Commission and the Financial Supervisory Service, and earlier worked on the political, city and business desks, reporting on a wide range of issues.
Insurance sector expands voluntary retirement amid digital transformation, M&As
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By Jun Ji-hye
The scale of voluntary retirements in the insurance sector during the second half of this year is expected to exceed that of previous years amid ongoing digital transformation and a series of mergers and acquisitions (M&As), industry officials said Monday.
As workforce restructuring is seen as inevitable during the integration process, companies are expected to focus more on encouraging voluntary departures rather than enforcing layoffs.
Hanwha General Insurance is scheduled to complete its merger with Carrot General Insurance by September, and voluntary retirements may follow. Older employees at Hanwha are expected to be the primary targets, given Carrot's relatively younger workforce.
According to industry watchers, around 20 percent of employees are typically affected by workforce reductions during mergers. With labor costs largely fixed, insurers view restructuring as inevitable in their efforts to improve efficiency.
Similar voluntary retirement plans are expected to be considered at Tongyang Life Insurance and ABL Life Insurance, as Woori Financial Group is set to complete its acquisition of the two companies on July 1.
Shinhan Life has been implementing regular voluntary retirement programs since its merger with Orange Life. In 2021, 265 employees left the company, followed by 107 in 2023 and 60 in 2024.
Another round is expected in the second half of this year, mainly targeting employees aged 55 and older under the peak wage system.
At the same time, the insurance industry is accelerating task automation as part of its digital transformation.
Samsung Fire & Marine Insurance raised its underwriting automation rate from 70 percent in 2021 to 88 percent this year.
NH NongHyup Property and Casualty Insurance, for its part, recently adopted an artificial intelligence-powered claims assessment system, aiming to boost its automation rate to 17 percent by 2028.
Kyobo Life Insurance already offered voluntary retirement to 200 employees in January.
The company has maintained a special early retirement program since 2015 for those with at least 15 years of service. In 2022, over 300 employees exited the firm through the initiative.
"The purpose of implementing voluntary retirement programs is to address the aging workforce driven by automation and to support employees as they prepare for their next chapter in life," an official from the insurance industry said.