Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Will Shinhan accelerate establishment of digital insurer?
Shinhan Life Insurance headquarters in Seoul / Courtesy of Shinhan Life Insurance
By Lee Min-hyung
By Lee Min-hyung
Shinhan Life Insurance CEO Sung Dae-kyu
Shinhan Financial Group is expected to speed up its drive for the launch of a digital life insurer next year, after uncertainties over top management controlling the group's insurance business were cleared away during a recent year-end reshuffle.
In recent years Shinhan been searching for a non-life insurance firm, in a move to complete building its group-wide insurance portfolio. For now, the financial group has two life insurers, Shinhan Life Insurance and Orange Life Insurance, which will be integrated into one entity in July 2021.
In contrast, KB Financial Group, which maintains a neck-and-neck rivalry with Shinhan, is on track to complete its insurance portfolio. After KB finalized its takeover of Prudential Life Company of Korea this year, the group is chalking up more profits by running both life and non-life insurance affiliates.
If Shinhan maintains a wait-and-see stance as to the establishment or purchase of a non-life insurance unit, chances are that the group will be under growing pressure to catch up with its rival.
But as there are few profitable non-life insurers for sale on the Korean market, Shinhan is expected to resume its drive for the launch of a digital non-life insurer. The scenario is feasible in that one of the group's core management goals next year is to achieve a digital transformation.
Shinhan decided to launch a big data division to take control of the group's data-related businesses during its year-end reshuffle, Thursday, when its board of directors reiterated its strong determination to turn the group into a more digitally-agile financial company in line with the consumption paradigm shift here and abroad.
After Shinhan named Shinhan Life Insurance CEO Sung Dae-kyu as the leader of the integrated life insurance entity, Shinhan Life, all eyes are on whether he will be able to use his leadership for the group to expand its influence in the insurance market.
As Sung is standing at the forefront of transforming the group's insurance-related businesses, he will likely play a more proactive role in Shinhan's possible establishment of a non-life digital insurer.
This July, Sung expressed hopes for the group to set a new insurance standard by continuing investment on the so-called “insurtech,” a combination of the words insurance and technology.
“We will reshape the insurance industry standard by taking full advantage of artificial intelligence (AI) driven insurance technologies,” Sung said.
He made the remarks after Shinhan Life Insurance launched an insurance sales affiliate, Shinhan Financial Plus.
With Sung extending its leadership for two more years, expectations are that he will handle a series of digital tasks for its sustainable growth amid the industry's structural slowdown.
“Sung is considered one of the most digitally-agile top-ranking officials in the insurance industry, considering his proven track record in combining technologies into insurance,” an industry official said.
Before joining Shinhan, Sung served as chief of the Korea Insurance Development Institute where he introduced an AI powered insurance premium calculation system.