Non-bank institutions set to face leadership changes

Major non-banking institutions, including insurers, are set to face leadership changes this year with their earnings falling amid the longstanding economic slowdown, industry sources said Monday. Park Jong-won, the president of Korean Re Co., Korea's top reinsurer, is likely to resign next month after staying in the top post for the fifth consecutive term since 1998, they said. Park, who has maintained the longest stint as chief in the local insurance sector, is expected to hand over the top post to Won Jong-gyu, the incumbent executive managing director and the third son of Korean Re's honorary chairman. Park Seok-hee, the president of non-life insurer Hanwha General Insurance Co., is likely to step down, apparently taking responsibility for lackluster earnings and leakage of its customers' data even though his official term ends in April next year, sources said. The non-life insurer was slapped with punitive actions by the financial regulator as the company allegedly tried to cover up the hacking attack that occurred in 2011, which led to the leakage of massive customer data. Korea's insurers have seen their earnings squeezed as a long streak of low rates has continued to weigh down their investment returns. The combined net profit of local life insurers came to 2.3 trillion won (US$2.05 billion) in the April-December period last year, up 1.5 percent from a year earlier, according to the financial watchdog. Korea's banking sector is already undergoing a major reshuffle as heads from four banking groups -- close aides to former President Lee Myung-bak -- offered to resign in recent months, apparently giving in to government pressure. Shin Je-yoon, the chairman of the Financial Services Commission, earlier made it clear that banking chiefs need to be people who are "on the same wavelength" as President Park Geun-hye.