Top insurer asking staff to call time early

Samsung Fire & Marine Insurance, the country’s No.1 non-life insurer, said yesterday it will again implement a voluntary retirement program in an apparent bid to cut costs during the economic slowdown.

About 150 workers are expected to apply for the retirement program this year, the insurer said. Samsung Fire has implemented the program since 2009.

“The program is not meant to cut our workforce, but to help those who have decided to leave the company for a better opportunity,” an official from the insurer said.

However, market watchers said the move comes as the lack of viable high-yield investment options amid volatile market conditions weighed on the firm’s asset management returns, while payouts to policy holders surged following a series of typhoons that hit the country last summer.

Samsung Fire said its net profit declined 9.7 percent on-year to 436.1 billion won ($400 million) in the first half of fiscal 2012 due to increased loss rates.

The loss rate refers to the proportion of coverage a non-life insurer pays to its policy holders from the insurance premium. The higher the loss rate is, the more likely the insurer is to go into the red.

Other smaller industry players are also expected to streamline their labor force by 400 to 500 workers to remain in the black, market watchers said.
Meanwhile, Samsung Life Insurance, another financial arm of Korea’s top conglomerate Samsung Group, said it would not reduce its workforce this year in an effort to beef up its sales capacity.

Yonhap