The Korea Times

Earthquake insurance to debut

By Kang Seung-woo The nation’s non-life insurance companies and the government are considering offering earthquake insurance in the wake of Japan’s strongest earthquake ever last week, industry sources said Tuesday. According to sources, some non-life insurers are considering suggesting that the government support their plan to sell insurance policies to cover potential earthquake damage. Local insurers do not currently provide stand-alone insurance products covering damages from quakes. “Korea needs to introduce insurance policies that compensate for losses, as Japan did,” said an official of the sector, while planning to propose the issue to policymakers. Japan introduced the earthquake insurance in 1966 and the government shares 95 percent of the payouts, which range from 1.73 trillion won ($1.53 billion) to 5.5 trillion won, while the market players take care of the remainder via reinsurance and retrocession. For the state-backed earthquake insurance policies that the insurance firms are looking to launch, the companies want to share with the government the bur

Mar 15, 2011By Kang Seung-woo

Companies

Avoid risk, go for steady income

MetLife expert on retirement plans advises Korean baby boomers By Kang Seung-woo Korea’s baby boomers need to seek ways to secure guaranteed income in preparation for their post-retirement life, rather than engage in high-risk, high-return investments, a U.S. expert said. A recent study by the MetLife Korea Foundation, the Seoul National University Institute on Aging and Gallup Korea showed that baby boomers are currently saving for retirement in installment savings, stocks and funds along with real estate. “They want extremely high returns, but no risk. If you look at the risk return issue, the higher the return, the more the risk. What baby boomers really need to look at is decreasing the risks to see more income," John Migliaccio, director of research at the MetLife Mature Market Institute (MMMI), said in an interview with The Korea Times. “If they have more ways of guaranteed income during their life whatever they might be, that will be helpful to them (in preparing for retirement) because they do not have to worry about whether the stock market goes up or down and

Mar 14, 2011By Kang Seung-woo

Companies

Reluctant giver?

Lee claims to have never heard about profit sharing, but economists offer to fill him in By Kang Seung-woo Despite Samsung Electronics Chairman Lee Kun-hee’s dismissal of profit sharing, many companies have already implemented systems similar to that suggested by former Prime Minister Chung Un-chan. Chung, who is now heading a presidential commission for shared growth, has been calling for big businesses to implement a scheme of profit sharing between them and smaller subcontractors. Apparently, the suggestion has miffed Korea’s most influential businessman, who told reporters Thursday that he had never heard about the implementation of such a scheme in his life and wondered whether Chung got the idea from communism. However, economists point out that the idea is nothing new. “There is a benefit of sharing in economics, so we cannot say that there is no concept of profit sharing,” said Lee Phil-sang, an economics professor at Korea University. The 69-year-old tycoon criticized a recent proposal by the former prime minister for large businesses to share their profi

Mar 11, 2011By Kang Seung-woo

Companies

Lee’s aide to take over KDB

Former finance minister known as President’s tutor on economy By Kang Seung-woo Former finance minister Kang Man-soo, better known as President Lee Myung-bak’s tutor on the economy, will most likely be the next head of the state-run Korea Development Bank (KDB) Financial Group, a financial regulator said Thursday. With Kang looking set to take the KDB job, the four top financial groups, KB, Woori and Hana, along with KDB would be led by those with close ties to President Lee. However, he is expected to face a tough road ahead to reach the high-profile post due to rising opposition. The Financial Services Commission (FSC) announced that the 65-year-old life-time bureaucrat has been nominated as chairman of KDB Financial Group. “Kang is the right person for the job,” FSC Chairman Kim Seok-dong told reporters. “He will revitalize the KDB, since the functions have been so mismanaged that the bank as a whole has underachieved in its goals.” The candidate for the top KDB post needs the final nod from the President and if Kang is approved, he will replace current Cha

Mar 10, 2011By Kang Seung-woo

Companies

Korea ranks 32nd in intl tourism competitiveness

By Kang Seung-woo Korea ranked 32nd out of 139 countries in this year’s Travel and Tourism Competitiveness Report, with several unfavorable factors putting the nation behind its neighbors. The World Economic Forum (WEF) released its fourth edition of the Travel and Tourism Competitiveness Index (TTCI) Tuesday and the biennial report ranked Korea 32nd with 4.71 points out of 10, one notch lower than two years ago. Switzerland topped the list for the second straight year with 5.68 points, followed by Germany and France, which scored 5.5 points and 5.41 points respectively. Two other European countries, Austria and Sweden, rounded out the top five. The United States, Canada and Singapore were the three non-European countries to make the top 10 this year. In the Asian-Pacific region, Korea came in sixth. Singapore ranked first scoring 5.23 with Hong Kong the runner-up with 5.19 points and Australia coming in third. The WEF said, “Korea’s strengths lie in its excellent ground transport and ICT infrastructure, which were ranked 18th and eighth respectively, and its rich

Mar 9, 2011By Kang Seung-woo

Companies

Banks see capital ratio going down

By Kang Seung-woo Korean banks’ capital adequacy ratio crept down in the fourth quarter of last year from the previous quarter due to payouts of year-end stock dividends, the financial watchdog said Wednesday. According to the Financial Supervisory Service (FSS), 18 lenders’ average Bank of International Settlements (BIS) ratio registered 14.6 percent as of the end of December, down from 14.62 percent in the third quarter of 2010. The banks’ capital adequacy ratio, which dipped to 10.87 percent in September 2008, reached a record high of 14.7 percent in March last year. The BIS ratio measures the financial soundness of a bank by comparing its capital with risky assets, with a ratio above 10 percent evaluated to be sound. The FSS noted that the decline in the capital adequacy rate came as lenders tapped their capital holdings in the October-December period to pay out dividends to shareholders. Among the nation’s top four banks, Hana Bank suffered the sharpest drop of 1.69 percentage points to 14.04 percent after paying out stock dividends of 1.9 trillion won, while Sh

Mar 9, 2011By Kang Seung-woo

Companies

Blue-collar workers drink, smoke more

By Kang Seung-woo Blue-collar workers are found to still drink and smoke more than their white-collar counterparts, a state-run statistical office said Tuesday. However, they also see a silver lining, as their spending on liquor and cigarette has declined. According to Statistics Korea, blue-collar workers’ average expenditure on the two items per month stood at 33,175 won ($29.72) last year, compared with 24,182 won spent by white-collar workers. Blue-collar workers perform manual labor and earn an hourly wage, while white-collar workers carry out non-manual labor often in an office and earn a monthly or annual salary rather than an hourly wage. Blue-collar workers were well ahead of white-collar ones in terms of the ratio of spending on the two items in 2010, as the former’s amount accounted for 1.65 percent of their monthly spending of 2 million won against 0.84 percent of 2.86 million won by the latter. But those in the working classes have reduced their spending on alcohol and cigarettes. The amount registered 34,099 won in 2008, 33,544 won in 2009 before am

Mar 8, 2011By Kang Seung-woo

Companies

Korean baby boomers not ready for retirement

By Kang Seung-woo The Korean baby boomer generation is not fully ready for its post-retirement life, although they are optimistic about it, a report by the Korean arm of a U.S.-based life insurer showed Tuesday. The MetLife Korea Foundation, the Seoul National University Institute on Aging and Gallup Korea jointly released a study of 4,668 boomers, titled “Korean Baby Boomers in Transition.” These people were born between 1955 and 1963, the period after the Korean War ended in 1953 that saw a sharp increase in birthrates. The report said that only 27 percent of them have calculated their retirement income needs. Considering the fact that the oldest Korean baby boomer reached 55 in 2010 and retirement can begin as early as this, the low retirement income calculation rate could emerge as a serious national problem. It also said that only about half of baby boomers are currently saving for retirement. The average amount of savings for retirement is 172,000 won ($154) per month and a large majority of baby boomers possess insurance policies for retirement (8 out of 10).

Mar 8, 2011By Kang Seung-woo

Companies

Financial CEOs to be kept on tighter leash

By Kang Seung-woo The financial regulator said Monday that it has strengthened its supervision to regulate CEO risks at financial firms. According to the Financial Supervisory Service (FSS), it has added new measures to the current inspections of chief executives and financial companies have been notified. The financial watchdog said that from this month it plans to confirm whether CEOs have enough expertise to lead the firms and asked them to devise stricter requirements and conditions in the selection process of future heads. Under the current inspection procedure, candidates without reasons for disqualification can become board members, but the new measure will require them to select more professional executives with tougher standards. In accordance with the updated measures, the FSS will monitor to see if CEOs are wielding their leadership properly to draw approval and incorporate their organizations. A system to ban CEOs from being reappointed for an excessively long time has also been implemented. The address of the newly-enhanced supervision came after a p

Mar 8, 2011By Kang Seung-woo

Companies

FSS to crack down on card firms street promotions

By Kang Seung-woo A top financial regulator issued a warning Monday that credit card companies need to refrain from excessive promotions that are feared to hurt the industry’s financial soundness and tempt consumers to spend more. “Don’t try and concentrate only on expansion,” Financial Supervisory Service (FSS) Governor Kim Jong-chang said in a meeting with CEOs of seven credit card issuers ― Samsung, Lotte, BC, Shinhan, Hana SK, Hyundai and newly-born KB Kookmin. Kim said that it is absurd that “these reputable card firms to attract customers through such illegal methods as street promotions.” He said, “Due to an assortment of freebies and slashed commissions at the sacrifice of profits, their profitability in credit sales has eroded.” His caution came as credit card companies aggressively increased their spending to provide gifts and other benefits for purchasing on plastic in their rising competition to lure customers and boost sales. According to the FSS, the average marketing cost of local credit card firms reached 25.4 percent of their total profits in 20

Mar 7, 2011By Kang Seung-woo

Kang Seung-woo

Read more

Earthquake insurance to debut

Avoid risk, go for steady income

Reluctant giver?

Lee’s aide to take over KDB

Korea ranks 32nd in intl tourism competitiveness

Banks see capital ratio going down

Blue-collar workers drink, smoke more

Korean baby boomers not ready for retirement

Financial CEOs to be kept on tighter leash

FSS to crack down on card firms street promotions

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