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Prudential is latest Korean insurer to offer voluntary retirement

Published: 14 Dec. 2020, 18:47 Updated: 14 Dec. 2020, 20:33

The Prudential Life Insurance Company of Korea is headquartered in Gangnam District, southern Seoul. [PRUDENTIAL LIFE INSURANCE COMPANY OF KOREA]

Prudential Life Insurance Company of Korea has started accepting voluntary retirement for the first time as the coronavirus pandemic and low interest rates continue to impact its performance.

According to Prudential Life Insurance Company of Korea on Monday, it is taking applications for early retirement until Wednesday. The program targets employees that have worked for 20 years or more at the company or those born before 1977.

Those taking early retirement will be granted up to three years of base pay depending on their continuous service years at the company, as well as some additional support, the company said. Details regarding the support fund were not revealed.

Established as the Korean unit of U.S.-based Prudential Financial in 1989, Prudential Life Insurance Company of Korea has never slashed its workforce.

However, insurance companies have been struggling as Covid-19 has made face-to-face selling of insurance programs difficult and low interest rates have pulled down sales of long-term insurance products such as whole life insurance.

“We’ve fared pretty well this year despite Covid-19 thanks to favorable sales of so-called dollar insurance products,” a spokesperson from Prudential Life Insurance Company of Korea said. “But we started taking early retirement considering the recent market environment.”

For dollar insurance products, insurance subscribers pay in U.S. dollars and also collect payments in U.S. dollars.

For the insurer headquartered in Gangnam District, southern Seoul, this could also be a way of eliminating any overlapping workforce before merging with KB Life Insurance.

Prudential Life Insurance Company of Korea was acquired by KB Financial Group earlier this year and is expected to merge with the existing life insurance wing of the group, KB Life Insurance, in the near future. KB Life Insurance has recently downsized its workforce by taking voluntary retirement from employees aged 46 or older as well, according to industry sources.

Before Prudential, Hanwha General Insurance let go of 150 employees and Hyundai Marine & Fire Insurance cut 70 members of staff earlier this year, both through voluntary retirement.

BY KIM JEE-HEE [[email protected]]