AIA Korea undergoes organizational overhaul

By Kim Bo-eun

AIA Korea CEO Peter Chung

AIA Korea has conducted an organizational overhaul in an effort to promote a more horizontal culture under the leadership of the new CEO Peter Chung.

Chung began his term as chief of the Korean unit of the Pan-Asian insurance group in January.

Among the first actions he took as CEO was the reorganization of the unit.

"He wanted to break down silos and make the existing rigid organization culture more horizontal," a company official said. The term silos refers to isolation of divisions and employees within an organization due to unwillingness or absence of channels of effective communication and information sharing.

Under Chung, many divisions were integrated to make them multifunctional.

"The changes were made so that various functions would be interlinked with one another," the official explained.

The CEO has also stressed the need for better communication, and has allocated time to take a coffee break with employees every week.

Chung meets with five employees at a time, to hear their thoughts.

"The coffee breaks are immensely popular among employees ― when applications for the next coffee break open, all the places are filled up immediately. All of the slots for June have already been filled," the official said.

This approach is attributed to Chung's background as he has spent most of his career outside of Korea.

Prior to assuming the top post at AIA Korea, Chung served as chief marketing officer of the unit from 2016 to 2017. He has more than two decades of experience in life insurance, technology and consulting. He played a key role in launching AIA Vitality, which is a program seeking to enhance the health of policyholders.

The changes to AIA's Korea unit come amid the ongoing transformation of insurers here to become more agile in a digital era as well as increasingly tough market circumstances.

The insurance industry has been considered one of the most conservative industries.

However, under persisting low interest rates and a mostly saturated market here, players are seeking to make their organizations more flexible.

Insurers' combined net profit came down to 5.33 trillion won last year, which was a 26.8 percent fall from a year earlier and the lowest level in 10 years since the 2009 financial crisis.

Many foreign players have left the market in recent years, amid an environment that continues to deteriorate.

The U.S.-based financial services group Prudential sold its Korea unit to KB Financial Group in April. PCA Life Insurance was sold in 2018 and Allianz in 2016. ING group sold its life insurance unit in 2013.

AIA Korea has stated it intends to continue to operate here, having recently switched to a subsidiary as a means to stay for the long term.

AIA entered the Korean market in 1987 and switched to a subsidiary in January 2018.