Samsung Life CEO Jeon put to test amid pandemic
Samsung Life Insurance’s dive in net profit in the first quarter of the year has put the new chief of the nation’s largest life insurer to the test.
The insurer posted 229.9 billion won for the first quarter, down 48.6 percent from 447.3 billion won in the same period last year.
CEO Jeon Young-muk began his term in March, and while he may be able to escape responsibility for the insurer’s first quarter performance, he will face the burden of bringing up earnings in the next three months.
The insurer’s poor performance is attributed to the coronavirus-triggered stock market plunge in March, as the company holds a large percentage of stocks in its portfolio.
Samsung’s earnings are in contrast with those of other insurers, where new CEOs took the helm at a similar point in time as Jeon. Hana Life saw its earnings grow by 171.4 percent in the first quarter of the year, and Hanwha General Insurance switched to a surplus in the same period, with a 236.1 percent surge in net profit.
Hana’s performance was based on yields from alternative investments such as real estate and funds. Increasing the percentage of alternative investments allowed the insurer to reduce losses from investments in stocks while enjoying greater rates of return than bonds. Hanwha, meanwhile, took a cost-cutting approach, slimming down its organization.
Samsung’s life insurance unit also continues to face conflict with holders of its cancer policy. Since January, policyholders have been occupying part of the firm to protest its refusal to make payments.
The terms of the policy state that payments would be made if policyholders were admitted to an institution for cancer treatment. Policy holders have sought payments for nursing home fees, but Samsung has claimed that these expenses are irrelevant.
These are payments that the financial authorities advised the company to make in 2018. Samsung’s stance is that it cannot make payments until a court ruling on this is made.
Jeon will be tasked with improving consumer protection. Samsung Life Insurance is notorious for refusing claims, with figures being the highest in the industry. It also holds the highest percentage of consumer complaints.