NongHyup Life scrambling to turn around
The NongHyup Life Insurance head office in Seoul / Yonhap
By Jhoo Dong-chan
NongHyup Life Insurance, NH Financial Group's life insurer unit, is on alert mode after it suffered a net loss of 100 billion won ($87.7 million) worth of net loss last year. It was the first time for the insurer to post a loss since the firm was established in 2012.
According to the Financial Supervisory Service (FSS), NongHyup Life posted a 114.1 billion won net loss last year. It posted an 85.4 billion won net profit in 2017, but turned to a loss in the following year.
It appointed former Hana Alternative Asset Management CEO Kim Hee-seok as the insurer's chief investment officer (CIO) in December 2014, but he failed to salvage NongHyup Life's declining earnings. Kim retired from the post last year to head Hana Alternative Asset Management once again.
The insurer's return on assets under management was 4.1 percent in 2014, but has since plunged every year to reach 2.63 percent last year. The figure is the lowest among the nation's life insurers.
In a bid to counter last year's loss, NongHyup Life appointed Hong Jae-eun as its new CEO earlier this month. Serving various posts at NH Financial Group, Hong headed the group's business strategy division before he came to the post.
Along with Hong, NongHyup Life also named former National Pension Service overseas securities division chief Cho In-shik as the firm's new CIO.
With its new management, the insurer said Friday it formed an asset management taskforce to improve its return on stock investment because the loss is attributed to its lousy stock investment sector.
Highlighting the gravity of the situation, NH Financial Group also set up its own taskforce separate from the insurer's move to help enhance the life insurer's asset management.
“NongHyup Life has been too aggressive in the asset management,” said a NongHyup Life Insurance official.
“We are going back to square one. We will manage our assets conservatively to maximize our corporate value while guaranteeing sustainable growth.”