Will Korean Re manage to avoid sibling rivalry again?

Korean Reinsurance Company CEO Won Jong-gyu, left, and full-time adviser Won Jong-ik

By Park Jae-hyuk

Attention is being focused on whether Korean Reinsurance Company (Korean Re) full-time adviser Won Jong-ik's highly likely intervention in management affairs will lead to a dispute with his younger brother, CEO Won Jong-gyu, over control of the nation's only reinsurer.

Market watchers are also wondering whether this will affect the third-generation family succession at the reinsurance company.

According to a recent regulatory filing by Korean Re, the appointment of the older brother as an executive director will be discussed at a general shareholders meeting slated for March 26. If he successfully joins the board of directors, he will be able to take part in the decision-making process for the company's management.

He has advised on Korean Re's engineering insurance underwriting and claim adjustment since 2010, based on his three decades of work experience at Daelim Industrial.

He was once expected to clash with the Korean Re CEO, when their father, Chairman Won Hyuk-hee, died in 2016. Back then, the older brother owned a 3.52 percent stake, while the younger one held a 3.5 percent stake. As a result, all eyes were on the deceased chairman's 3.17 percent stake, which could have enabled one of them to solidify control over the company.

The brothers were eventually able to avoid a dispute because the late chairman's shares went to his two daughters, each of whom owned less than a 1 percent stake at that time.

Since then, the Korean Re CEO has increased his stake to 4.35 percent.

Given the CEO has developed his expertise in the reinsurance business since joining Korean Re as a rank-and-file employee in 1986, the company has continued to rule out the possibility of the owner family members squabbling over management control.

In addition, he has been able to serve his fourth term, with his reappointment as executive director set to be discussed during the upcoming shareholders meeting.

From that standpoint, some observers believe the brothers could co-manage the reinsurer by giving the older sibling the position of chairman or board chairman, although the company said nothing has been decided regarding his role.

At this moment, the Won family collectively holds a 22.54 percent stake in Korean Re.

Among them, Chang In-soon, the widow of the late chairman, owns the largest stake at 5.72 percent, followed by the CEO with a 4.35 percent stake and the full-time adviser with a 3.52 percent stake.

The National Pension Service holds more than a 7 percent stake, and there are two other majority shareholders with over 6 percent stakes. However, Shinyoung Securities with a 6.2 percent stake is viewed as an ally of the owner family because the brokerage is managed by their relatives.