An insurance firm built on a deep affection for education
Shin Chang-jae (56)
Back then, the national income per person was less than $70, so most families weren’t wealthy enough to be insured. Of course, that made business for life insurance companies like Kyobo even tougher.
But even in those frugal days, Shin noticed that Korean parents were always willing to invest some of their income to guarantee their children’s educational future, and so he introduced the nation’s first education insurance policy through the Daehan Kyoyuk Insurance Company, now Kyobo Life Insurance, 51 years ago. “Kyoyuk” means education in Korean.
A descendant of an independence fighter, Shin had always been interested in promoting national education, which has remained Kyobo Life’s secondary mission after creating domestic capital.
Kyobo Life Insurance’s Gangnam office building in Seocho-dong, southern Seoul. Provided by the company
“Even in a developed nation, it takes 50 years for a life insurance company to settle in and grow,” he told his employees.
As the “miracle on the Han” picked up steam and Korea’s economy grew, people became concerned about their personal welfare, allowing the company to market a variety of insurance policies to help people facing health or financial problems.
As his company diversified to offer life, health and variable insurance policies, as well as pension and retirement plans and asset management, Shin changed the company’s name from Daehan Kyoyuk to Kyobo in 1995.
Over the decades, the company has grown into one of Korea’s top three insurance companies in terms of market share.
Last year was the 50th anniversary of Kyobo Life Insurance’s establishment, and although the late founder, who passed away in 2003, wasn’t there to celebrate, his successors have seen his promise to grow the company fulfilled.
While the global economic downturn has more than halved many life insurers’ profits, Kyobo Life’s net profit for fiscal 2008 was 291.6 billion won ($234 million), surpassing Samsung Life Insurance’s 113 billion won. It was the first time Kyobo Life had outpaced Samsung in 10 years. The company also beat its longtime rival Korea Life Insurance, which posted profits of just over 80 billion won.
Last year, Kyobo Life received an A2 insurance financial rating from Moody’s Investors Service, the first time a domestic life insurer had won that rating from an international rating agency.
The figure behind that impressive outcome is Shin Chang-jae, the company’s chairman and CEO, who is also the founder’s eldest son.
The chairman has an unusual background compared to his counterparts at other conglomerates.
Instead of taking the well-trodden route of most conglomerates by planning from an early age to succeed his father, Shin Chang-jae joined the company when he turned 40 in 1993 at his father’s request.
The younger Shin began serving as chief director of the Daesan Foundation, an affiliate of Kyobo Life that sponsors writers and local literature. He then served as vice chairman of Kyobo from 1996 to 2000. He was inaugurated as chairman of Kyobo in 2000.
In the years before that, Shin Chang-jae, a graduate of Seoul National University medical school, taught obstetrics and gynecology at his alma mater.
When he came to succeed his father, some wondered whether the former medical professor could adapt to the competitive business world.
But those concerns faded as Shin made it clear he has his own way of managing business and a vision that emphasizes change and innovation. Shin also stresses customer satisfaction.
“There have been a lot of changes to Kyobo Life since I became the CEO. What deserves attention among those changes is that Kyobo Life is now customer-oriented. The insurance business is different from the manufacturing sector in that people are a vital asset. A positive attitude, trust and care for customers are more important than anything else,” Shin said.
According to Kyobo, the reason it achieved high net profit for fiscal 2008 can be found in how the company handled risk management, such as reductions of exposure to overseas debt in times of crisis. Kyobo Life had only invested in products the company had complete knowledge of.
“Its [Kyobo’s] product profile, which includes whole life, annuity, health/disability, savings, investment-linked, protection and retirement products, is well diversified,” Sally Yim, a Moody’s assistant vice president and analyst, said last year when the rating agency assigned the company an A2 insurance financial strength rating last year. “Moreover, the company relies mainly on financial planners ? that is solicitors ? as its main distribution channel, and their productivity has gradually improved over the past few years.”
Kyobo Life’s 2008 sales including insurance income and assets under management increased to 12.683 trillion won from 12.314 trillion won the year earlier. Its return on assets last year also jumped 8.3 percent to reach 50 trillion won, according to the company.
With Kyobo’s assets growing over time, the company has established some financial subsidiaries in sectors including real estate and investment banking. It also owns a bookstore.
Currently, the company’s many subsidiaries, which are operated under a common management structure, include Kyobo Securities, Kyobo AXA Investment Managers, Kyobo Book Center, Kyobo Realco, Kyobo Info & Comm., Kyobo Insurance Investigation, Saengbo Real Estate Trust, A&D Information and Kyobo Datacenter.
Kyobo Life’s subsidiaries and their chief executives all help strengthen the company’s image and brand.
Shin Yong-kil, president of Kyobo Life Insurance, is in charge of the company’s business-to-business management. He has been at Kyobo Life for a long time, in charge of planning and asset operations. He was president of Kyobo Auto Insurance from 2002 to 2006.
Kyobo Securities is engaged in the provision of financial services, especially to the investment banking sector.
The company was established after Kyobo acquired Daehan Securities Company, the nation’s first securities house, in 1994.
Kim Hae-jun, CEO of Kyobo Securities since 2008, is an old-timer in the securities business. In his more than 25 years in the financial world, Kim has worked for Daewoo Securities Company as head of the firm’s asset management in the operations division and joined Kyobo Securities as head of the financial division in 2005.
Kyobo AXA Investment Managers, an investment trust management company, was initially founded as Kyobo Investment Management Company, an affiliate of Kyobo Life, in 1988.
The local company established a joint corporation with the French-based financial company AXA Group last August.
Cheng Liao, CEO of Kyobo AXA Investment Managers, comes most recently from AXA Rosenberg in Tokyo where he was CIO. Cheng was also CEO and CIO at AXA Rosenberg Singapore and CEO at AXA Rosenberg Hong Kong. He has 20 years of experience in the industry and holds a master’s degree in operations research from Stanford University.
In addition to Kyobo Life’s financial subsidiaries, the company also owns Kyobo Book Center, the nation’s leading bookstore.
The literary company was founded in 1981 in the ground floor of Kyobo Life’s head office in Gwanghwamun, central Seoul, as part of the founder’s vision to promote national education.
The bookstore also has branches in Gangnam, Busan, Daegu, Daejeon and Incheon. The company also sells books online.
The CEO of Kyobo Book Center is a bibliophile. With a bachelor’s degree in English education from Hankuk University of Foreign Studies, Kim Seong-ryong is one of the founding members of the chain. He came to the company in 1981 and was made CEO last year.
When the late founder decided to build a bookstore on the ground floor of the company headquarters in the early 1980s, many executives were against it.
They argued that a bookstore would not help increase company profit.
But the founder persuaded them, saying, “How can anyone compare the benefits of having a bookstore to having a commercial arcade? What is worth more than having a place where people come to acquire wisdom?”
*“Faces inside Korea’s conglomerates,” a regular weekly series about key figures in the nation’s major companies, will also feature major figures within Korea’s giant financial groups.
By Lee Eun-joo [angie@joongang.co.kr]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)