CEO Watch Meritz gears up to challenge big 4 insurers

By Kim Bo-eun

Meritz Fire & Marine CEO Kim Yong-beom

Meritz Fire & Marine Insurance is drawing attention after it posted a dramatic growth in earnings last year, amid the poor performance of the industry. Eyes are on whether CEO Kim Yong-beom will be able to challenge the order of the big four non-life insurers.

Meritz posted a net profit of 301.3 billion won in 2019, a 28.4 percent growth from a year earlier.

The big four players leading the industry ― Samsung Fire & Marine Insurance, Hyundai, DB and KB ― each saw their net profits fall by 39.5 percent, 28 percent, 27.9 percent and 10 percent in 2019, respectively, from the previous year.

Meritz's net profit in 2019 surged 162.5 percent from five years earlier in 2014. This is attributed to the strong leadership of CEO Kim Yong-beom, who assumed his position in 2015.

Boosted by Meritz's growth in earnings, Kim is aiming to secure the insurer's position among the top players in the industry. Meritz has long ranked fifth.

Under Kim's leadership, Meritz's market share in terms of premium income has steadily grown from 7.9 percent in 2015 to 8.1 percent in 2016, 8.5 percent in 2017 and 9.2 percent in 2018. Last year, it took up 10.1 percent.

The company has also successfully switched its focus to long-term health insurance. Such policies are considered key for future earnings in the non-life insurance industry, as it has become difficult to make profit from auto and property insurance.

Meritz collected 6.86 trillion won in premiums from such policies last year, which is an 18.4 percent growth from a year earlier. Meanwhile, auto insurance premiums the insurer collected fell by 16.6 percent to 651.3 billion won, as Meritz made the switch to long-term health insurance.

This was done through aggressive sales in competition against Samsung. As a result, Meritz's market share in long-term health insurance jumped to second, with 21.8 percent, after Samsung, which takes up 22.3 percent.

The firm has also seen an impressive return on investments. Its yields on investments for the first three quarters of last year stood at 5.77 percent, which was higher than KB's 3.36 percent, DB's 3.64 percent and Samsung's 3 percent.

It has also drastically been slashing costs in sales fees and advertising.

Kim has vowed to focus on customers this year. In his New Year's address, he urged employees "to focus not on competitors, but on customers."

Kim is expected to seek qualitative growth this year, after aggressive expansion achieved last year.