KDB Life Headquarters. /Courtesy of KDB Life Insurance

KDB Life Insurance, which has fallen into complete capital erosion, is strenuously working to normalize operations by appointing a 'sales expert' as a key executive. However, the appointment of the next CEO, who will play a pivotal role, remains uncertain. This is due to the delay in the appointments of the chairman of Korea Development Bank (KDB), which is KDB Life's parent company and a policy bank, as well as the Financial Services Commission chair and the Financial Supervisory Service head. However, experts in the insurance industry argue that to overcome the crisis, it is essential to select an insurance expert as the representative rather than bureaucrats, academics, or political appointees.

According to the insurance industry on the 10th, KDB Life has recruited insurance experts as its top priority for normalizing the company. A notable case is the departure of Vice President Kim Hee-tae, who was replaced by former Fubon Hyundai Life Executive Kim Byung-cheol in March. Vice President Kim Hee-tae previously led the sale during his tenure as CEO of Aviva Life (now iM Life), and he was recruited with the potential sale of KDB Life in mind. In contrast, the newly appointed Kim Byung-cheol is considered a 'sales expert' as he started as an insurance planner and has worked in the insurance industry for over 20 years. This indicates a determination to improve profitability by enhancing sales capabilities rather than focusing on asset sales.

KDB Life also appointed Jeong Jin-taek, who served as Chief Financial Officer (CFO) at iM Life in May, as the head of the financial strategy group. He previously worked at Hanwha General Insurance as the head of risk management and the strategy planning department. Nam Gyu-hyun, who was appointed head of the dedicated channel department, is recognized for his extensive experience in sales, having served in various positions such as branch manager, deputy minister, and sales manager at what was formerly Green Cross Life and Hyundai Life.

On the other hand, the appointment of the next CEO is expected to be delayed. This is due to the vacancy of the chairman of the Industrial Bank, who holds significant influence over the selection of executives. The insurance industry anticipates that the appointment of the CEO of KDB Life will become official only after the heads of the financial authorities and the Industrial Bank are established. KDB Life CEO Im Seung-tae's term expired in March, but he has kept the position to date due to the political climate surrounding the presidential impeachment.

Voices in the insurance industry argue that the new CEO of KDB Life should be selected as an insurance expert rather than a bureaucrat, academic, or political appointee. With the sale now virtually impossible, there is a need for an expert with experience in the field of insurance and practical work to enhance profitability. As of the first quarter of this year, KDB Life's liabilities stood at 17.9888 trillion won, exceeding its assets of 17.1489 trillion won. Excluding 240.2 billion won of subordinated debentures, which are liabilities, the actual equity is -375 billion won, indicating complete capital erosion.

Kim Byeongcheol, Senior Vice President of KDB Life. /Courtesy of KDB Life

CEO Im Seung-tae is a former economic bureaucrat who has served as the Secretary-General of the Financial Services Commission's secretariat. His connection to the insurance sector is limited to his time at the Ministry of Finance, where he worked as a secretary in the insurance policy division. Rather than being an insurance expert, he is predominantly viewed as a political appointee who served as the chief economic advisor to former President Yoon Suk-yeol during the presidential campaign.

Former CEO Choi Cheol-woong, who succeeded Im, has no experience in the insurance sector, having spent over 30 years at the National Tax Service. After completing public office, he worked as the vice president of the Korean Association of Certified Public Tax Accountants and as a tax accountant at a law firm. He first stepped into the insurance sector in 2018 as an audit committee member of KDB Life and was appointed as CEO in 2021, three years later.

Former CEO Choi is succeeded by Jeong Jae-wook, a professor in the Department of Business Administration at Sejong University. He is an academic who holds a master's and doctorate in financial insurance and has worked as a researcher at the Korea Institute of Finance. He has served as an outside director at LIG General Insurance (now KB General Insurance), but he has no experience in the field of insurance practice. As it was revealed that then-industrial bank chairman Lee Dong-gul and Jeong worked together at the Korea Institute of Finance, he faced criticism as a 'parachute appointment.'

Nevertheless, Jeong was also the person who achieved the closest result to the long-awaited sale of KDB Life. Since Jeong took office in 2018, KDB Life managed to escape two consecutive years of net losses and successfully turned a profit. In June 2020, private equity firm JC Partners was selected as the preferred bidder for KDB Life and came very close to acquiring equity, but failed to obtain approval from the Financial Services Commission for a change of major shareholder.

An industry insider noted, "It is an undeniable fact that in the past, individuals appointed to the position of CEO of KDB Life were in line with government inclinations," and remarked, "If we think about KDB Life's future, the next CEO must be an insurance expert, which is a common perspective across the industry."