Korean Union Demands Intervention in Troubled Insurer to Safeguard Policyholders and Jobs
On March 17, the Korea Financial Services Workers Union-MG Non-Life Insurance Union (KFSWU-MG) held a press conference outside the Korea Deposit & Insurance Corporation (KDIC) headquarters in Seoul. The union demanded immediate action from the state financial stability authority to ensure the sale of the struggling insurer, MG Non-Life Insurance, protects the interests of 1.25 million policyholders and secures employment for its workforce.
MG Non-Life Insurance was declared insolvent in April 2022 after its risk-based capital ratio fell. The KDIC subsequently appointed a management team to oversee the company’s sale.
Failed Bidding and Union Disappointment
After three unsuccessful tender notices between January 2023 and July 2024, the KDIC chose Meritz Fire & Marine Insurance Co Ltd as the preferred negotiator in December 2024, granting an exclusive negotiation period. However, Meritz withdrew from the bidding process on March 13, citing internal and external issues.
Bae Young-Jin, President of the MG union, expressed strong disappointment with Meritz’s offer, which would have retained only 10% of the company’s workforce of 500 employees. Bae stated, “We are greatly disappointed at the Meritz offer which would accept only 10% of employees and offer 250 million won (approximately US$173,000) in compensation to those leaving the company.”
Lee Jae-Jin, President of KFSWU, an affiliate of UNI, urged the government to consider alternative proposals. He referenced the successful investments by the Korea Development Bank (KDB) in Hyundai Heavy Industries and Daewoo Shipbuilding Company during the global financial crisis. Lee also cited the KDIC’s profitable investment in Seoul Guarantee Insurance Corporation, which recently concluded with an initial public offering. “Now we are back at the starting point. The financial authorities must reconsider the sale plan, including public fund injection, to save policyholders and guarantee employment security for the sake of insurance market stability,” Lee said.
Union Offers Cooperation
The union highlighted that no insurance company in Korea has previously been liquidated, with restructuring typically involving timely government intervention. The union announced its willingness to cooperate with the KDIC and Financial Supervision Commission (FSC) to find a new bidder.
“We are deeply concerned about the rights of policyholders and employment security in our workplace. If necessary, we will consider a certain level of concession and offer full cooperation to find a new bidder. We propose establishing a special committee to proceed with the sale of MG insurance company at a reasonable price and under reasonable conditions in the market,” the union stated.
Rajendra Acharya, UNI Asia & Pacific Regional Secretary, shared the unions’ concerns, stating, “We fully understand the frustration of the MG Non-Life Insurance Union and strongly support the solidarity shown by KFSWU for its member union. We urge the KDIC and the FSC to take heed of the unions’ demands and offer of cooperation that protects policyholders and employees of MG Non-Life Insurance from falling victim to a fire sale of the company.”
