Will chiefs of Shinhan's two insurers extend terms?

Shinhan Life Insurance CEO Sung Dae-kyu, left, and Orange Life Insurance CEO Cheong Mun-kuk / Courtesy of each company

By Anna J. Park

As the annual year-end CEO reshuffle for each of Shinhan Financial Group's affiliates approaches, eyes are on who will get to lead a newly integrated life insurer combining Shinhan Life Insurance and Orange Life Insurance from next year.

Shinhan Financial Group took over Orange Life for 2.3 trillion won ($2.06 billion) in September 2018; the group announced earlier this year that Shinhan Life and Orange Life ― currently led by CEOs Sung Dae-kyu and Cheong Mun-kuk ― will continue as an integrated entity from July 2021.

Both CEOs' two-year terms are set to end in December, and questions are arising over whether their terms could be extended for another year and who will be appointed to lead the merged entity from July.

Considering that Shinhan Group Chairman Cho Yong-byoung has been emphasizing growth rates in revenue and profits as key standards for personnel matters, CEO Sung from Shinhan Life might enjoy a slight edge over Orange Life CEO Cheong.

Shinhan Life recorded a net cumulative profit of 171.3 billion won during the first to third quarters of this year, a 56 percent increase from the same period last year. This is a big number, especially when comparing Orange Life's 0.8 percent year-on-year growth during the same three quarters.

Sung's work experience at the finance ministry as well as various state-run financial authorities including the Financial Services Commission (FSC) also buttress his solid performance in increasing net profit.

However, Cheong's extensive expertise in insurance also makes him indispensable in the significant period of the two companies' merger process in the next few months. Starting his career at a local insurance company back in 1986, Cheong went on to lead Korea units of Allianz Life, ACE Life and Orange Life as CEO over the past 10 years. That's why some market watchers raise the possibility that both CEOs' terms might be extended at the end of the year for a smooth transition next year.

Regarding the matter, both Shinhan Life and Orange Life explain that the CEOs' terms will be decided on at Shinhan Financial Group's year-end management committee meeting slated for mid-December.

An official from Shinhan Financial Group also reiterated that any decision about extending the CEOs' terms will be made at the meeting.

“All we can say for now is that nothing has been decided, and we need to wait and see the outcome of the management committee's meeting that are slated to come out in mid-December,” the official said.

Shinhan Life and Orange Life have long been operating a special taskforce to integrate the two insurers with different backgrounds and working culture.

“It's already been almost two years since the merger took place early last year. Working group-level taskforce projects as well as active personnel exchanges are currently ongoing,” the official from Orange Life said. “The two companies will continue to absorb each firm's strengths, aiming to create the utmost synergy from the integration.”