MONTHLY MAGAZINE OF THE EUROPEAN BUSINESS COMMUNITY IN KOREA
Overview of Insurance Sector
MINISTER OF STRATEGY IN SU RAN
EASE OF DOING BUSINESS
THE EUROPEAN UNION CHAMBER OF COMMERCE IN KOREA
Infomag Talk Fundamentally Strong
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As many of you who have been in Korea for a couple of years
may be aware, Chuseok is one of Korea’s most largely celebrated
holidays. It is a time when families and friends gather to share
food and enjoy their time together, giving thanks to their ancestors
for the year’s bountiful harvests.
This year, Korea’s representative traditional holiday of Chuseok
falls on October 3 rd of the solar calendar. It will last three days,
from October 2 nd to 4 th and falls on a weekend this year. It is
a prime opportunity for foreigners to tour Korea’s cities and
experience Korea’s culture while all the bustling crowds are
away visiting family relatives.To all the readers (Korean and
foreigners), I would like to convey my best wishes for Chuseok.
Aptly enough, starting this month, we have made signiﬁcant
changes to the design and layout of your favorite magazine.
While not many changes have been made to the contents (and
the high standards will be maintained), we hope this new format
of Infomag, which is aesthetically pleasing, will meet your
The Cover Story of this issue takes a look at the Insurance
industry. There is no doubt that Korea’s insurance industry has
experienced many changes in recent years. Today, it faces a host
of challenges ranging from low interest rates, sluggish growth, and
an aging population to intense cross-sectoral competition.
The In Focus section analyzes the World Bank’s annual report
measuring the ease of doing business. Korea ranked 19 th out of
183 countries climbing four steps higher than last year’s 23 rd. This
year’s ranking is also the nation’s highest ever.
For Infomag Talk we met with Minister of Strategy & Finance
Yoon Jeung-hyun, who explains his priorities and strategies.
The ministry oversees the daily economics of the public, and
is committed to the advancement of the domestic economy
and establishment of growth dynamics through effective policy
coordination, fair tax systems, public enterprise reform, and
systematic distribution of national resources, efﬁcient budget
management and active international cooperation.
On the lighter side, the Feature section brings you Lee Yang-
won, an artist who made major contributions to the development
of contemporary Korean art with his portraits, landscapes and
Hope you like this new format of Infomag. If you have any
comments, please feel free to contact us.
Jean Marie Hurtiger
The European Union Chamber of Commerce in Korea
CONTENTS October 2009 No. 101
Editorial 6 24
Policy decisions, latest statistical projections,
business and cultural news that counts
Infomag Talk 24
Minister of Strategy & Finance
World Bank-IMF Meeting
Cover Story 32
Insurance Industry in Korea
In Focus 62
Ease of Doing Business in Korea
Policy Check 78
Latest Government Measures
FTA Watch 82
CONTENTS October 2009 No. 101
EUCCK Busan 105
Korea Sighting 124
Interesting Articles on Korea
Hotel News 129
Airline News 136
BOD List 138
Committee List 139
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Infomag is published monthly by All In One Communication
Korea Receives More Foreign Korean Economy Grows 2.6%
Direct Investment Quarter-On-Quarter
FDI Trends for 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Real gross domestic product (chained volume measure of GDP)
* Figures shown in billions of dollars increased by 2.6 percent compared with the previous quarter.
* Figures represent aggregated FDI from January to July This is also a 0.3 percentage point upward revision compared with
the advance estimates released on July 24th. The GDP estimates
released are based on more complete source data from the in-
Foreign direct investment (FDI) pledges have hit their highest dustrial production index, service industry activity index, etc than
level in nine years, totaling $6.79 billion for the ﬁrst seven months were available for the advance estimates.
of 2009 for a year-on-year increase of 32.4 percent. After a steep On the production side, the manufacturing sector increased
drop in the ﬁrst quarter, FDI rebounded in May and the upward 8.9 percent, which was mainly due to growth in the majority of
trend remains steady. Enhanced price competitiveness and signs sub-sectors including electric and electronics manufacturing and
of a rapid economic recovery are believed to be behind the in- transport equipment manufacturing.
crease. Foreign investors are also expressing greater conﬁdence Services rose by 1.1 percent as the growth in financial in-
in Korea’s economic growth potential. termediation accelerated and transport & storage and business
The surge in FDI is especially noteworthy because the global activities shifted to positive growth. Facilities investment showed
economic recession has depressed FDI in most advanced coun- 10.1 percent growth, mainly inﬂuenced by recovery from its earlier
tries and some emerging markets. A survey of 240 company ex- relatively low levels both in machinery equipment and in transport
ecutives from the largest non-ﬁnancial transnational corporations equipment.
by the United Nations Conference on Trade and Development
(UNCTAD) found that nearly 58 percent of respondents planned
to cut back investment in 2009.
Nevertheless, Korea has been receiving positive attention
from international agencies with regard to its future economic
growth prospects. The International Monetary Fund (IMF) recently
New Prime Minister and Six
adjusted its economic growth forecast for Korea, predicting the Cabinet Members Nominated
economy would contract only 1.8 percent compared with a previ-
ous estimate of 3 percent. The Organization of Economic Coop-
eration and Development (OECD) predicted that of all 29 OECD
member countries, Korea’s economy would rebound at the fastest
The President named Professor Chung Un-chan of Seoul National
University as a new Prime Minister last month.
In addition, a list of six new nominees for the Cabinet was
announced. They include Lee Kwi-nam, former Vice Minister of
Justice, as Minister of Justice; Kim Tae-young, Chairman of the
Joint Chiefs of Staff, as Minister of National Defense; Choi Kyung-
hwan, Grand National Party lawmaker, as Minister of Knowledge
Economy; Yim Tae-hee, Grand National Party lawmaker, as Minis-
ter of Labor; Paik Hee-young, Professor of the Food and Nutrition
Department at Seoul National University, as Minister of Gender Mr. Chung Un-chan, New Prime Minister of Korea
Equality; and Joo Ho-young, Grand National Party lawmaker, as
Minister for Special Affairs. of ordinary citizens and middle pragmatic way. Notably, three law-
The focus in the selection process this time was placed on makers were chosen to join the Cabinet. The newly created post
whether the nominees would be able to fulfill their duties in a of Minister for Special Affairs reflects the strong determination
substantive manner in line with the philosophy of governance of of the Administration to facilitate communication and join forces
President Lee, which is embodied by measures for the well-being with the ruling party.
Trade Figures for August 2009 Foreign Reserves Increase for
Sixth Consecutive Month
The Ministry of Knowledge Economy has released its trade ﬁgures
for the month of August. The national trade balance totaled $1.7
billion, posting a trade surplus for the seventh consecutive month.
Exports slid 20.6 percent year on year to $29.1 billion. Export
volume was down across the board, with the exception of LCD de-
vices (up 31.9 percent). Exports to Latin America (down 19.8 per-
cent), the European Union (down 41.3 percent), the Middle East Korea’s official foreign reserves as of the end of August 2009
(down 30.2 percent), China (down 13.2 percent), the United States amounted to 245.46 billion dollars. This was an increase of 7.95
(down 13.1 percent), ASEAN countries (down 22.4 percent), Japan billion dollars from the 237.51 billion dollars total at the end of the
(down 20.7 percent) and Oceania (down 27.3 percent) declined preceding month (an increase for the sixth consecutive month
during the ﬁrst 20 days of August. since March).
Imports totaled $27.4 billion for a decrease of 32.2 percent. This increase was attributable to the IMF’s allocation of new
Inbound shipments of crude oil (down 45.9 percent), petroleum Special Drawing Rights (3.38 billion dollars), to a rise in operating
products (down 48.5 percent) and gas (down 55.8 percent) fell proﬁts on the foreign reserves, to redemptions at maturity of the
from the same period the previous year. Imports of capital and foreign currency liquidity supplied by the Bank of Korea and the
consumer goods also dropped 17.5 percent and 12.8 percent, re- Foreign Exchange Stabilization Fund, to an increase in the U.S.
spectively. However, consumer conﬁdence is picking up and this dollar translation values of euro, Japanese yen and other currency
seems to have slowed the rate of decline. assets in line with the stronger exchange rates of those curren-
cies against the dollar, and to redemptions at maturity by the Na-
tional Pension Service of its currency swaps agreement with the
Bank of Korea (0.64 billion dollars).
Korea’s ofﬁcial foreign reserves consist of 214.09 billion dol-
Household Spending up 1.7% from lars of securities (87.2%), 26.84 billion dollars of deposits (10.9%),
3.47 billion dollars of Special Drawing Rights (1.4%), 0.98 billion
Last Year dollars of its IMF reserve position (0.4%), and 0.08 billion dollars
of Gold (0.03%).
hold marked 2,663 thousand won in the second quarter 2009, up
1.7 percent from the second quarter 2008.
The average monthly income per household recorded 3,299
thousand won in the second quarter 2009, which fell 0.1 percent
from the second quarter 2008. The real income declined 2.8 per-
cent from the second quarter 2008.The regular income rose 1.1
percent, while the non-regular income fell 24.0 percent.
The average monthly consumption expenditure per house-
hold marked 2,071 thousand won in the second quarter 2009,
which rose 1.4 percent from the second quarter 2008. The aver-
age monthly non-consumption expenditure per household was
593 thousand won in the second quarter 2009, which rose by 2.9
percent from the second quarter 2008.
The average monthly disposable income per household was
2,706 thousand won in the second quarter 2009, falling 0.7 per-
The average monthly income per household amounted to 3,299 cent from the second quarter 2008. The surplus went down by 6.9
thousand won in the second quarter 2009, down 0.1 percent from percent to 636 thousand won and the surplus rate decreased by
the second quarter 2008. The household expenditure per house- 1.6% point to 23.5 percent.
National Energy Saving Efforts ‘Sheriffs’ Recruited to Fight
Paying Off Hackers
Korea is seeing good progress in its efforts to conserve energy by More than 3,000 “cyber sheriffs” will be appointed to protect com-
reducing standby power levels. Standby power is the energy an puter systems from acts of online terrorism like the distributed
electrical product consumes when it is switched off, and Korea’s denial-of-service attacks that hit the country two months ago, the
national goal is to reduce the level of standby power for all elec- government has announced.
trical products to 1 watt by 2010. The new plan also calls for the National Intelligence Service
In the meantime, the Ministry of Knowledge Economy has to be in charge of overall countermeasures against such attacks,
set intermediate goals for targeted products including televisions, coordinating with the private sector or other governments.
computers, monitors, printers, multifunction printers, set-top box- The Korea Communications Commission will handle identify-
es and microwaves. Under a new labeling program, products that ing and eliminating so-called zombie computers as well as warn-
exceed the Ministry’s recommended standby power levels must ing the public about the threat these compromised computers
carry a yellow warning sticker. pose. It will also make regulations more compatible with cyber
As of July 2009, 4,580 electrical products met the Ministry’s protection measures. The Ministry of National Defense will be in
intermediate goals regarding standby power, compared with only charge of training the “cyber defense command” by next year.
2,418 at the end of 2008. This represents an 89.4 percent jump. The cyber sheriffs will be computer experts including those
The most dramatic improvement was observed among printers, who have excelled at “hacking competitions” from as early as
which saw an almost threefold increase in the number of power- their teens. Information sharing and analysis centers will also be
saving models on the market. Companies are working actively to set up in certain industries such as shipping and automobiles to
develop technology in this area and are voluntarily cutting produc- prevent information from leaking during a hacking attack. In addi-
tion of items that use high levels of standby power. Consumers tion, programs on cyber safety will be set up at select universities.
are also doing their part, showing a preference for power-saving
products when they are available.
If the current positive trend continues, Korea can expect to
save nearly 56.2 billion won (about $45 million) worth of energy
every year. The Korean military will have a difﬁcult time maintaining a desired
level of manpower over the next several years, as the number of
men subjected to the draft continues to fall and the term of the
According to the Military Manpower Administration, an agen-
cy under the Ministry of National Defense that manages service-
Fewer Men, Shorter Service Hits related issues, the draft rate in the Korean armed forces could fall
Draft from more than 94 percent last year to 93 percent this year.
The draft rate refers to the percentage of soldiers currently
in service, in relation to the number of soldiers that the military
requires each year. The administration’s target for the minimum
draft rate is 93 percent.
According to the administration, the draft rate reached over
97 percent in 2005 but has fallen every year since then. It esti-
mates that the figure could bounce back up to 95 percent by
2012 but may not attain the 2005 – level in the near future.
The Defense Ministry estimates that the number of healthy
Korean men who turn 20 in a given year, and thus become eligi-
ble for service, will continue to decline. There are 275,000 healthy
men who turn 20 this year, or about 92 percent of the 300,000
active members that the military requires. The ministry estimates
that the eligible men will peak at 328,000 by 2012 and then will
drop to 248,000 by 2021.
First Korean Satellite Fails Death Rate of AI Gets Higher
After seven delays, South Korea’s ﬁrst space rocket lifted off the
launch pad on August 25th, but failed to place a scientiﬁc satellite
into precise Earth orbit.
The Ministry of Education, Science and Technology said on
26th of August that while the ﬁrst and second stage rockets of the
Korea Space Launch Vehicle-1 (KSLV-1) separated as planned af-
ter liftoff from the Naro Space Center at 5 p.m. on 25th of August,
one of the two fairings covering the satellite did not fall off prop-
Only one fairing was ejected 216 seconds after launch with
the other section remaining in place until the Science and Tech-
nology Satellite-2 (STSAT-2) separated from the second stage A South Korean man infected with the Inﬂuenza A (H1N1) virus
rocket 540 seconds into the ﬂight, the ministry in charge of the has died, bringing the local death toll from the contagious disease
country’s science and technology policies said. to seven, South Korea’s health authorities said.
The 78-year old man, who has long suffered from high blood
pressure, hepatocirrhosis and other diseases, was presumed to
have died from complications stemming from the new ﬂu on Sun-
day, according to the Ministry of Health and Welfare.
The exact cause of death was still under investigation, the
President Lee’s Scholarship ministry said.
Also, an 8th patient who was 64-year-old female died on Sep-
Foundation Launched tember 16th.
According to the ministry, the man was conﬁrmed as being
infected with the Inﬂuenza A virus on September 12th, after show-
ing symptoms of high fever and coughing.
The ﬁrst outbreak of the new ﬂu in South Korea was reported
in early May, and the ﬁrst fatality from the disease was reported
on August 15th. A total of 7,576 conﬁrmed ﬂu infections were re-
ported across the nation as of September 10th, according to the
A foundation handling President Lee Myung-bak’s donated wealth
has ofﬁcially been launched and is expected to start handing out
scholarships early next year, according to the foundation ofﬁcials.
The president donated KRW 33.2 billion, or over 90 percent
of his lifetime savings, in July under a campaign pledge to give
all of his personal wealth back to society with the exception of a
house for his family after his retirement.
“The foundation will offer various scholarship programs that
best conform to President Lee’s intentions. It will work to make
sure as many children and students as possible will receive ben-
eﬁts,” foundation head ofﬁcer, Song Jeong-ho said.
Construction of Taekwondo Park Park Breaks Salary Record for
Begins Korean Football
Ground was broken here for the world’s first taekwondo park, Park Ji-sung will become the ﬁrst Korean football player to receive
which the government hopes will become a Mecca for the nearly over 7 billion won per season. The three-year deal with Manches-
70 million practitioners of the Korean martial art worldwide. ter United is reportedly worth £3.64 million (7.2 billion won, $5.98
Hundreds of people from around the country and abroad million) per season. The midﬁelder’s new deal is a 30-percent in-
came to this city in North Jeolla Province, about 240km away crease on his previous contract of £6.2 million with the Red Devils
from Seoul, to attend a ceremony marking the event. Among them and will run through June 30, 2012.
were Prime Minister Han Seung-soo and International Olympic With Park’s current contract set to expire at the end of the
Committee members Moon Dae-sung and Phillip Walter Coles, of current season, the English Premier League’s defending champi-
South Korea and Australia, respectively. ons entered contract talks with Park’s representatives, JS Limited,
The 2.31 million square meters park is scheduled to be com- late last month. Manchester United ofﬁcials had decided to delay
pleted in 2013, and will feature a 5,000-seat stadium, exhibition contract negotiations earlier this year.
halls, training facilities, a research center, a graduate school and The Myongji University graduate signed his ﬁrst professional
an academy, government ofﬁcials said. contract with J-League’s Kyoto Purple Sanga in 2000 for 400 mil-
lion won and his value has steadily improved over the years. He
received a lot of attention after playing on the right wing under
Guus Hiddink during the 2002 World Cup. He went on to play for
Dutch club PSV Eindhoven under Hiddink for 840 million won.
Yang Stuns World with First Korean After helping the team reach the semiﬁnals of the 2004-05
UEFA Champions League, Park caught the eye of Manchester
PGA Championship Victory United manager Alex Ferguson. He signed with the English club
for 2 million in 2005, and his salary with the Red Devils has in-
creased every year.
Korean golfer Yang Yong-eun, 37, made history by becoming the
ﬁrst Asian player to win the 91st PGA Championship golf tourna-
ment at Hazeltine National Golf Club in Chaska, Minnesota on
August 16th (USA time).
Yang, having beaten the world’s number one golf player Tiger
Woods, savored his Wanamaker Trophy. The PGA Championship
was the last major tournament of the year.
Yang was initially trailing behind Woods by two shots. He
later added one eagle, two birdies and two bogeys, achieving an
8-under 280 strokes, beating Woods, who later lost by three shots,
scoring 5-under 283. In third place were England’s Lee Westwood
and Northern Ireland’s Rory McIlroy, both with three under par.
Up till now the best performance by a Korean golfer at a
major tournament was made by Choi Kyung-ju, who came in third
place at The Masters Tournament in 2004. This time he reached
24th place with 3-over 291 strokes.
The news articles have been compiled from korea.net
Infomag Talk Fundamentally Strong
including Korea, are
showing signs of
bottoming in response
to massive ﬁnancial
and ﬁscal stimulus
Minister of Strategy & Finance Yoon Jeung-hyun
Infomag Talk Fundamentally Strong
What are your views on the health of the Korean effectiveness of job policies including job creation in the
economy? By when do you expect it to fully service industry, start-up promotion and manpower training
turnaround? to meet industry demand.
Fourth, to ease the burden on low-income earners and
The fundamentals of Korea’s economy are sound compared small business owners who are hit hardest by the economic
to other economies. Korea’s financial sector is relatively recession, the Korean government will continuously support
healthy and measures for bank nationalization have not them.
been taken. The nation holds sufficient foreign reserves
and external debt structure is improving since September,
2008. As of the end of June 2009, Korea holds $ 231.7 bil- According to recent report by economic thinktanks,
lion, equivalent to the amount of current payment for 7.4 the Korean economy is falling into a “low growth trap”
months, exceeding $ 185.8 billion of current foreign debt (as due to a continuing fall in consumption and investment.
of the end of the 1st quarter of ‘09). External debt has also The view is that country should ﬁrst enhance private
decreased from $ 422.5 billion in Sept. ‘08 to $ 380.1 billion spending to help jumpstart the economy instead of
in March ‘09. Plus, Korea is more ﬁscally sound than major increasing budget allocations and public expenditure.
economies. What is your view?
If you compare the consolidated central government
balance (to GDP %, IMF Jul. ‘09): (Korea) 2.1 (US) 13.5 Although we experienced economic downturn in the 4th
(Japan) 10.3 (UK) 11.6 (G20 average) 8.1 quarter of last year due to the global economic crisis, the
At the same time, the Korean government is carrying economy is now bouncing back faster than other countries.
out corporate restructuring in the public and the private Once recording negative growth in the fourth quarter of last
sectors to address remaining unsoundness and inefﬁciency. year, Korea’s economic growth turned positive in the first
It is too early to tell when the Korean economy will make quarter of this year. Further, the economy increased 2.6%
a full recovery as uncertainty remains high. But we predict from previous quarter in the second quarter of this year.
that the economy will grow further from previous quarter in However, it is the government driving the economic growth
the second half of this year and post growth rate close to through expansionary fiscal and easy monetary policies,
the potential growth rate next year. while consumption and investment in the private sector re-
The government will maintain its expansionary macr-
What are the main priorities of the Ministry for the oeconomic stance for a while, but private consumption and
second half of this year? investment will be the key to steady economic growth. And I
think this applies to other countries around the globe, too.
Although the Korean economy is projected to grow in the Therefore, to stimulate private consumption and in-
Minister Yoon at a policy coordination meeting with other ministers
second half of this year, uncertainty remains high. There is vestment, the government will create more jobs, support
a possibility that international financial market could slip people’s livelihoods, improve business environment and
into instability again and fiscal space could shrink along streamline regulations.
with exchange rate and oil price volatility and H1N1 pan-
The Ministry of Strategy and Finance (MOSF) was estab- demic. Under these circumstances, the Korean government
lished in March 2008 when the Ministry of Finance and “Although the Korean is committed to making every effort to keep robust growth What steps is the government taking to increase
Economy and the Ministry of Planning and Budget were in the second half of this year. foreign investment in Korea?
merged to establish fair tax systems and efficient fiscal/ economy is projected to First, until the economy makes a visible recovery, the
economic policies. As the ministry that oversees the daily government will maintain its expansionary macroeconomic With foreign investment facilitation high on the agenda, the
economics of the public, it is committed to the advance-
ment of the domestic economy and establishment of
grow in the second half stance while aggressively responding to negative factors
such as real estate market.
Korean government is establishing and carrying out meas-
ures needed to achieve the agenda. The aim is threefold:
growth dynamics through effective policy coordination, fair
tax systems, public enterprise reform, systematic distribu-
of this year, uncertainty Second, to secure a steady economic recovery driven
by the private sector, the Korean government will continue
to improve investment environment, to upgrade incentive
systems and to strategically draw foreign investment. First,
tion of national resources, efficient budget management
and active international cooperation. Playing a pivotal role remains high.” to stimulate private consumption and investment.
Currently, we are exerting strenuous efforts to promote
to improve investment environment, Korea will foster a pro-
business environment and provide more comfortable living
in the Korean economy, the MOSF has to lead the way in the domestic tourism market, draw more inward tourists, conditions for foreign investors.
the recovery from the current economic difﬁculties. improve business environment and boost investment in R&D Currently, the government is implementing “3-Year Plan
In an exclusive interview to Infomag, Minister Yoon and new growth engines. for Foreign Investment (’08~’10),” which is aimed at easing
Jeung-hyun explains his priorities and strategies. Third, for job security, Korea is doing its part to raise regulations on land use, adjusting the taxation system to
Infomag Talk Fundamentally Strong
the global standards and building more schools and clinics around the world. For example, we will increase tax credit
for foreigners. for R&D investment and the deduction rate will be higher
Second, for foreign investors to use them more ef- than any other countries in the world.
fectively and efﬁciently, we will upgrade existing three key Tax deduction on R&D expenditure: source technology-
incentive systems (e.g. tax cuts and exemption, financial (large companies) 25%, (SMEs) 35%, new growth engine
beneﬁt and support for land use). industry - (large companies) 20%, (SMEs) 30%
Third, to strategically draw foreign investment, we will At the same time, we are working to provide more
focus on industries such as high-value added industries in- comfortable living conditions for foreigners. To upgrade
cluding green growth industry and new growth engines. education and healthcare environment, the Korean govern-
ment is building additional international schools and train-
ing healthcare interpreters.
Do you have any message for European investors? Growing foreign investment in our country is the evi-
dence that foreign investors are feeling positive about Ko-
The European Union is an important economic partner rea despite the global ﬁnancial crisis.
for Korea. The EU is now Korea’s biggest foreign investor FDI (reported between January and July ’09) reached $
and the second largest trading partner with bilateral trade 6.792 billion, a 32.4% year-on-year increase. I appreciate Eu-
volume reaching nearly $100 billion last year. So far, EU’s ropean investors for making a great contribution to Korea’s
investment in Korea has been playing an important role in economy and expect to see further growth of European in-
upgrading the nation’s economic system. vestment in Korea.
The Korean government has taken up a number of
measures to make the nation a more attractive investment
destination for foreign investors from Europe and elsewhere
Advertorial IMF/World Bank 2009 Annual Meeting Special
Korea Financial Investment Association
Most opportune for investing in Korea
Coinciding with the entry of Korea’s stock China. If Japan investors’ interest in Korean such as accounts system as well as corpo-
market into FTSE advanced market, the market get higher in the months to come rate control structure improvement since
<2009 Korea Capital Market Conference> through this Conference, the relative impor- forex crisis, consolidating capital market-re-
held in Tokyo and Shanghai on Sep. 8th and tance of their investment in Korea which lated system as the level of advanced coun-
10th respectively, with the theme of “New is 0.5% level as of the end of 2008 (30.5 tries. Now that restructuring is stimulating
Opportunities & New Challenges” to attract trillion yen) among Japan entire oversea activity, the present time is most opportune
long-term investment funds from Japan as stock investment, is expected to get higher for investing in Korea’s good corporations
well as China garnered a lot of attention. greatly. with a relatively low risk, he stressed.
Under the joint auspices of Korea Following the first Tokyo 2009 Korea
Financial Investment Association and Fi- Capital Market Conference, another large
nancial Services Commission, Republic of scale ‘2009 Korea Capital Market Confer-
Korea, this 2009 Korea Capital Market Con- ence’ for Chinese institutional investors was
ference was to acquaint overseas investors held in Shanghai on Sep. 10th while approx.
with the Korean capital market aggressively 350 China corporate investors from 110
for institutional investors of Japan as well as China ﬁnance institutions related to Korea
China. investment such as China QDII were on
In the case of the Japan Conference, hand among high interest.
over 300 Japanese corporate investors from In China as well, KOFIA CEO Hwang
a total of 136 ﬁnancial institutions such as emphasized, “Don’t miss out both oppor-
Naito Securities, Traders Securities and so tunity and time of Korea investment.”, add-
forth attended it, showing that this Confer- ing that in particular, Korean stock market
ence was very beneficial for them to be began to be assessed as an advanced
able to understand comprehensively about market as can be seen in the case of FTSE
the Korean government’s policy direction. advanced country index entry.
From the Korean side as well, a total of Through his welcoming speech, Am-
40 securities business persons concerned bassador Shin Jung-seung, Embassy of the
unfolded their brisk investment attraction Republic of Korea in China, said that both
activities on the spot including Daewoo Se- Korea and China have overcome the eco-
curities, Daeshin Securities, NH Investment nomic crisis rapidly thanks to government’s
Securities, and so on. swift policy and corporate efforts. At the
In his opening speech, KOFIA CEO time when the exchange between capital
Hwang Kun-ho pointed out, “Japan’s in- market of the two countries enters into a
vestment in Korea is sluggish due to their full-fledged stage, Shin addressed that he
information shortage of Japanese investors sincerely hopes for this 2009 Korea Capital
about Korean market.” He stressed that Ko- Market Conference to serve as a foundation
KFIA Chairman Hwang opening speech
rea’s growth potential is big in the years to which bears a visible fruit of capital market
come in the light of the fact that sooner or exchange of the two nations.
later Korean securities market is expected Mr. Kim Joo-hyun, standing commis-
to be entered into MSCI advanced country sioner of Financial Services Commission,
index too following FTSE advanced country encouraged Korea investment by explaining
index entry this month. that Korea heightened market transparency
Vice chairman Rhee Chang-yong,
Financial Services Commission, also diag-
nosed through his keynote speech, “Dif-
ferently from the-then-1997 forex crisis,
Korea’s real economy is in good health and
capital market also is a stage which leaps
both quantitatively and qualitatively.” He
said that Korean government will support
aggressively by attaching the most priority
on market and corporation so that global
investors can enjoy their result.
The investment scale of Korean stocks
of Japan entire fund capital is no more than
one-tenth when compared with the U.S and 2009 Korea Capital Market Conference Conference Spot scene
The international Premium Challenges / 34
is undergoing rapid Getting the
changes, ever since Basic Facts Right / 48
the ﬁnancial meltdown
last year. Amidst such Block Exemption
dramatic changes, Regulation / 58
the Korean insurance
industry is also
There is no doubt that
changes in recent
The Korean insurance industry is proceeding towards glo-
years. Today, it faces balization to meet world standards, becoming more open
by pursuing sound and transparent business management,
a host of challenges and toward full-ﬂedged premium liberalization and relaxed
ranging from low However at the same time, there are concerns that hav-
ing become an advanced market, the insurance industry is
interest rates, showing low signs of saturation. Although the life and non-
life insurance markets are expected to increase, there will
sluggish growth, and be limitations for internal growth and thus, market players
must look elsewhere for sources of expansion.
Key issues in terms of market environment are the de-
an aging population to clining trend of interest rates and aging of the society. With
interest rates stuck in the single-digits, it is virtually impos-
intense cross-sectoral sible to live the silver years off interest income. Yet, against
this low-interest backdrop, Korea continues to age at a
competition. pace unmatched by any other country in the world. Experts
forecast that by 2018, the silver population will exceed 14
percent of total national population.
Then there are the cataclysmic changes taking place
on the competition front, which can be summed up as the
bringing down of barriers and competition at global levels.
As barriers between different ﬁnancial sectors are torn
down, products are sold through diverse distribution chan-
nels. This heats up the competition not only within a single
ﬁnancial industry, but even between unlike industries.
The rapid aging of society raises interest in life after
retirement, as well as demand for relevant products and
services. This is reﬂected in the rising popularity of pension
products at each company. Insurers must take the lead in
developing products and services based on thorough analy-
sis on health, livelihood and ﬁnancial risk of the silver popu-
Long gone are the days where single products and
services were enough to explore and develop markets.
Today, companies look for one-stop shopping of different
types of ﬁnancial services, ranging from banking, insurance
Bancassurance, for example, has already successfully
settled in the market, and many more of such changes in
products and services lie ahead. There are controversies ,
here , which we will look at later on.
In the coming years therefore, the nation’s insurance
industry is expected to undergo a drastic transformation.
Foreign players have increased their presence in the local
market recently but still their businesses have been largely
restricted compared to the banking sector.
Insurance businesses in Korea began to take root and
develop in 1962 when three major insurance-related laws
were enacted. In particular, significant improvements in
insurance-related regulations were achieved through the
consolidation of three insurance-related acts into the Insur-
ance Business Act in 1977. The insurance business in Korea
is divided into life, non-life, third-sector (i.e., insurance with
characteristics and features of both life and non-life insur-
Life Insurance Companies
The major sources of funds for life insurers include
capital contributed by their shareholders, premiums from
the policyholders, and investment income.
The Korea Insurance Development Institute (KIDI) es-
sentially set the insurance premium rates until April 2000
when the insurance industry was fully deregulated. The KDI
was set up in December 1989 as a rate-making organization
to succeed the former Korea Non-Life Insurance Rating As-
sociation. It performs the calculation of premiums and other
related functions entrusted to it by the government, insur-
ers, and other insurance-related organizations. Its members
consist of both life and non-life insurance companies.
Investment assets for most life insurance companies General Non-life Insurance Companies insurance companies, including 2 foreign insurance compa- cific risks, to increase individual insurers’ capacity, and to
mainly consist of securities, loans, bank deposits and real General non-life insurance companies in Korea include nies and 6 branches of foreign insurance companies. share liability when losses overwhelm the primary insurer’s
estate. Since the liabilities of life insurance companies are fire & marine, automobile, and other casualty insurance resources. The Seoul Guarantee Insurance Company, origi-
recognized in the form of policy reserves with a long ma- businesses. The products and premium rates of non-life Specialized Non-life Insurance Companies nally established in 1969 under the name Korea Fidelity
turity, the investment assets tend to have long maturities insurance companies have been deregulated since 1998, al- Reinsurance companies and Seoul Guarantee Insur- and Surety Company, specializes in providing guarantees
as well. At the end of the 1970s, there were only six life though KIDI is responsible to review the rates on an annual ance Company are also regarded as non-life insurance to entrepreneurs and individuals. Since 1989 when Hankuk
insurance companies in Korea. However, with substantially basis. The liabilities of non-life insurance companies mainly companies in Korea. Fidelity and Surety Company were as established, the two
lowered entry barriers amid market openings and deregu- consist of policy reserves whereas the investment assets Reinsurance companies, which function as — insurance guarantee insurance companies have provided a competi-
lation, as of December 2008, there were 22 life insurance mainly consist of securities such as bonds and stocks, companies for primary insurers, insure a certain portion of tive environment for the insurance market. However, after
companies in operation (14 domestic life insurers, 7 foreign loans, deposits and real estates. Since the liabilities of non- the risk of life and general non-life insurance companies. In the 1997-1998 ﬁnancial crisis, the two guarantee insurance
life insurers, and 1 branch of a foreign life insurer). Following life insurance companies have shorter maturity periods a reinsurance contract, the reinsurer charges a premium to companies merged as Seoul Guarantee Insurance Compa-
the onset of the 1997-1998 financial crisis, 9 life insurers compared to those of life insurance companies, the invest- indemnify the primary insurer against all or part of the loss ny in November 1998. As of December 2008, there were 10
were dissolved with the transfer of policies to other insurers, ment assets of non-life insurers also tend to be more liquid, that may be sustained under its policies. Reinsurance is a specialized non-life insurance companies: 2 were domestic
and five life insurers were merged as part of the financial such as cash and bank deposits. way for primary insurers to protect against unforeseen or companies and 8 were branches of foreign insurance com-
restructuring. (b) Non-life Insurance Companies As of December 2008, there were 20 general non-life extraordinary losses. It also serves to limit liability on spe- panies.
1948-59>>9 life insurers: Choseon (21), Daehan (46),
Korea (47)>>13 non-life insurers: Dongyang (22), New Life Insurance Companies
Dong-a (46), Dongbang (52) For FY2008 ended March 31, 2009 the preliminary net
income of life insurance companies fell to 617.2 billion won
1960-69>>6 life insurers: Choseon liquidated, Korea from 2.11 trillion won to record a drop of 70.7% or KRW1.49
(Korea+Dong-a) (62), Hyupdong liquidated (64)>>14 trillion on year. With the Kospi Index sagging from 1,703.99
Non-life insurers: Dongbu, Dongkuk, Haedong, Hy- at end-March 2008 to 1,206.26 at end-March 2009, insur-
undai, Dongbang etc. ance companies’ proﬁtability was hit largely by the 1.3 tril-
lion won decrease in investment gains and other conditions
1970-79>>6 life insurers: Korea Life Insurance liqui- affecting asset management.
dated, Donghae Life Insurance established (73)>>15 Seven out of the 22 life insurance companies reported
non-life insurers Due to the limit on the establish- losses for the period. Among others, the drop in net income
ment of insurance companies, there was no change in pulled all proﬁtability indicators down signiﬁcantly, including
the non-life insurance industry until the late 1980s. return on assets (ROA). Life insurance companies’ ROA was
0.2% while return on equity (ROE) was 2.9%, down by 0.5
1980-89>>25 life insurers: Foreign life insurers en- and 7.2 percentage points respectively.
tered the Korean market. Regional life insurance com- As a measure of gains and losses on investment, the re-
panies set up>>14 non-life insurers turn on invested assets also fell percentage points on year
1990-97>>33 life insurers: 2 foreign, 1 nationwide, Sales of Insurance Policies: Concerns over a prospec-
5 regional life insurance companies incorporated. tive economic slump dampened sales of new life insurance
Domestic life insurers advanced into the overseas policies and caused income from variable insurance to fall.
market. 12 overseas ofﬁces.>>17 non-life insurers: Life insurance companies’ premium income for FY2008,
The policy to liberalize prices of insurance products including those for special accounts, declined to 74.15 tril-
promoted liberalization of the insurance market (93) lion won, down 1.3% or 948.5 billion won from a year ear-
lier. First insurance premiums fell from 10.7 trillion won in
1998-99>>29 life insurers: 4 (International, BYC, FY2007 to 6.8 trillion won in FY2008.
Taeyang, Korea) liquidated.>>17 non-life insurers: The market share of large domestic life insurance com-
Korea+Daehan Guarantee, 1 incorporated (99) panies in terms of insurance premiums fell from 56.7% last
year to 54.3% while that of small and medium-sized life in- companies in FY2008 ended March 31, 2009 was 1.31 tril- The market share of the four large domestic non-life in-
2000-2001>>22 life insurers: 1 incorporated, 8 liqui- surance companies rose by 2.1 percentage points to 24.0% lion won, down 21.8% or 366.6 billion won from the same surance companies fell from 65.8% to 62.7% while those of
dated.>>22 non-life insurers: 7 incorporated, 2 liqui- and foreign insurance companies’ by 0.3 percentage points period a year earlier. Largely due to the 300.0 billion won small and medium-sized non-life insurance companies’ rose
dated (withdrawal) to 21.7%. decrease in income from securities investment, net income by 1.6 percentage points to 20.7%.
Large domestic life insurance companies include Korea fell last ﬁscal year despite an increase in sales of long-term Large domestic non-life insurance companies included
2002-2003>>23 life insurers: 2 incorporated, 1 liqui- Life, Samsung, and Kyobo while small and medium-sized insurance policies. Non-life insurance premiums from long- Samsung Fire & Marine, Hyundai Marine & Fire, LIG Non-
dated (03)>>27 non-life insurers: 6 incorporated, 1 life insurance companies include Hungkuk, Kumho, Green term insurance policies increased from 17.2 trillion won at Life, and Dongbu while small and medium-sized non-life
liquidated (02) Cross, Shinhan, Woori Aviva, Mirae Asset, KB, Dongbu, FY2007 to 20.0 trillion won in FY2008. insurance companies included Meritz fire and marine,
Tongyang, Hana HSBC, and SH&C. Foreign insurance com- Nine of the 29 non-life insurance companies reported Hanwha Non-Life, Lotte Non-Life, Green Non-Life, Hungkuk
2004-2005>>22 life insurers: 1 incorporated, 2 liqui- panies include Allianz, New York, MetLife, PCA, Prudential, losses. As a result of the fall in net income, all of the proﬁt- SsangYong Fire&Marine, and First Fire & Marine.
dated (1 withdrawn)>>28 non-life insurers: 2 incorpo- ING, LINA, and AIG. ability indicators also fell in FY2008. ROA fell by 0.8 percent- The market share of foreign insurance companies and
rated, 1 liquidated (withdrawal) Financial Soundness: As of end-March 2009, the age points to 1.9% while ROE declined by 5.0 percentage those of specialty insurers, such as online car insurers,
weighted average solvency margin ratio (actual solvency points to 13.4%. Worsening asset management conditions guarantee insurers, and reinsurance companies, increased
margin/statutory solvency margin) of life insurance com- also brought about the 0.7 percentage point fall in the re- by 1.5 percentage points over last year to 16.6%.
panies came to 216.3%, down 20.8 percentage points from turn on invested assets to 4.8% year-on-year. Financial Soundness: As of end-March 2009, the
the same period last year. Despite various efforts that saw The loss ratio on car insurance fell to 70.0%, down 2.7 weighted average solvency margin ratio of non-life insur-
1.4 trillion won in capital expansion, the fall in the solvency percentage points from the same period last year. Non-life ance companies was 275.5%, down 13.2 percentage points
margin ratio is largely ascribed to the 2.0 trillion won valua- insurance companies’ total retained premiums in FY2008 on year. Despite various efforts that saw the capital of non-
Before we dwell into greater details on some of the tion loss in long-term investment securities, among others. was 36.86 trillion won, up 12.0% or 3.95 trillion won on year life insurance companies increase by 300.0 billion won, the
above mentioned issues, lest take a look at the latest ﬁnan- mainly from the perennial demand in private health insur- solvency margin ratio fell as a result of the 500.0 billion won
cial position of the insurance companies operating in the Non-life Insurance Companies ance. The share of long-term products in the non-life insur- valuation loss in long-term investment securities from a de-
country. Profitability: The net income of non-life insurance ance market increased to 54.2%. cline in stock prices and the statutory solvency margin go-
ing up from the increase in long-term insurance sales.
Loan Delinquency Ratios Retirement Pension
A preliminary report showed that the loan delinquency According to an FSS analysis on the operating results
ratio of insurance companies as of June 30, 2009 was 3.81%, of Korea’s retirement pension market, total cumulative re-
down 0.28 percentage points from the end of May 2009. serves were 8.26 trillion won in H1 2009, up 24.9% from 6.61
Having maintained an upward swing after September 2008, trillion won at the end of last year. In H1, the number of
the trend of the delinquency ratios started turning around retirement pension contracts, reserves, and number of pen-
for both household and corporate loans with the recent sion holders all rose by 3.1%, 3.8%, and 3.6%, respectively,
drop in new delinquencies and overdue loans regaining on the monthly average. Cumulatively, there were 64,148
good standing, among others. retirement pension contracts, 8.26 trillion won in reserves,
and 1,381,209 pension holders as of end-June 2009.
The delinquency ratio for household loans was 3.25% in
June, down 0.21 percentage points from 3.46% in the pre-
ceding month. The delinquency ratio for mortgage-backed
loans continued to stay low at under 1.0% by reporting
0.81%, down 0.03 percentage points for the same period. Retirement Pension Market
Policy-backed loans also fell by 0.13 percentage points over Numbers of Contracts Reserves Number of pension holders
the preceding month to 4.55%. H1 2009 monthly avg. increase rate 3.1% 3.8% 3.6%
As of the end of June 2009, the delinquency ratio of Cumulative ﬁgures as of end-Jun. 09 64,148 KRW8.26 trillion 1,381,209
corporate loans was 5.28%, down 0.46 percentage points
from 5.74% in May. The delinquency ratio for SME loans in
June fell 0.57 percentage points over the preceding month
due to the recovery of overdue loans. Registered Retirement Pension Trustees: There were
52 retirement pension trustees registered and operating as
of end-June 2009. Two new trustees entered the market in
Delinquency Ratios of Insurance Companies (End of period) (In percent) Type of Pension Plans & Trustees: By type of pen-
09/2008 12/2008 01/2009 02/2009 03/2009 04/2009 05/2009 06/2009 sion, Deﬁned Beneﬁt (DB) plans led the two other types of
Household loans 3.19 3.27 3.48 3.38 3.25 3.29 3.46 3.25
pension plans - Defined Contribution (DC) and Individual
Retirement Accounts (IRA). Banks commanded the high-
Corporate loans 4.68 5.06 5.14 5.27 5.27 5.16 5.74 5.28
est market share of retirement pension trustees. DB plans
Total 3.61 3.76 3.94 3.90 3.82 3.84 4.09 3.81
accounted for 66.0%, followed by DC plans with 25.7%, and
Note: Total insurance company loans outstanding as of end-June 2009: KRW79.1 trillion IRA with 8.3%. By type of trustee, banks led with 51.0%,
(Life: KRW65.7 trillion, Non-Life: KRW13.4 trillion) followed by insurers with 36.5%, and securities companies
Compared with DC plans, the share of DB plans was
Delinquency Ratios of Household Loans (End of period) (In percent) prominently high at insurers with 81.1% and banks with
09/2008 12/2008 01/2009 02/2009 03/2009 04/2009 05/2009 06/2009 58.9%. Securities companies had similar levels for DB and
Policy-backed loans 4.39 4.53 4.80 4.54 4.45 4.47 4.68 4.55
DC plans with 50.4% and 47.1%, respectively. It was nota-
ble during the period that banks exceeded 50% of market
Mortgage-backed loans 0.68 0.74 0.82 0.83 0.84 0.82 0.84 0.81
share for the ﬁrst time.
Total 3.19 3.27 3.48 3.38 3.25 3.29 3.46 3.25
Type of Pension & Trustees (as of end of June 2009, in reserves) (In KRW100 mil)
Delinquency Ratios of Corporate Loans (End of period) (In percent) DB plans DC plans IRA Total
09/2008 12/2008 01/2009 02/2009 03/2009 04/2009 05/2009 06/2009 Insurers 24,448 81.1% 4,276 14.2% 1,428 4.7% 30,153 36.5%
SME loans 2.20 2.34 2.60 2.67 2.80 3.11 3.24 2.67 Banks 24,849 58.9% 12,128 28.8% 5,180 12.3% 42,157 51.0%
PF loans 2.23 2.44 2.54 2.55 3.00 3.99 4.59 4.06 Securities ﬁrms 5,186 50.4% 4,849 47.1% 251 2.5% 10,286 12.5%
Total 4.68 5.06 5.14 5.27 5.27 5.16 5.74 5.28 Total 54,483 66.0% 21,254 25.7% 6,860 8.3% 82,597 100.0%
Operations of Reserves: As of end-June, reserves
tended to be securely invested with 83.8% being in prod-
ucts guaranteeing principle and interest, such as savings
and term deposits. As much as 91.4% of DB plans’ reserves
were operated in guaranteed products, much higher than
64.8% in DC plans. In the case of insurers and banks, 94.5%
and 84.6% of the reserves were respectively allocated in
guaranteed products, much higher than securities compa-
Future Prospects: Retirement pension market is ex-
pected to continue growing on the sunset of the Retirement
Insurance and Retirement Trust plans in 2010 and competi-
tion among trustees will intensify. Banks are also expected
to continue building on their market share from their exten-
sive branch network and active reorganization.
Bancassurance 17% from 670.4 billion won in 2007. Life insurers paid 603.5
billion won in agency fees and nonlife insurers paid 177.4
South Korea’s bancassurance market saw a 16% drop billion won. Banks accounted for 92.6% of agency fees, to-
in new policy premium income to 3.15 trillion won in 2008 taling 723.2 billion won last year, with 552.5 billion won from
due to the impact of global ﬁnancial crisis, according to the life insurers and 170.7 billion won from nonlife insurers.
country’s insurance regulator. In 2008, the regulator said 109 financial institutions
New life insurance policies saw a 16% drop in sales were under agency agreements with insurance companies,
through the bacassurance channels to 2.92 trillion won, and including 16 banks, 20 securities ﬁrms and 73 mutual sav-
new nonlife policies fell 11% to 228 billion won. Sales of ings banks.
new insurance policies contributed 35.2% of total bancas-
surance premium income in 2008.
FSS said it will “further strengthen its monitoring of the Foreign Presence
market for incomplete and unlawful sales” as business con-
ditions for bancassurance have been adversely affected by Currently, there is a total of 17 foreign non-life insur-
the global ﬁnancial downturn. ance companies operating in Korea, with three in the form
Overall, the bancassurance market posted a 7.2% rise of subsidiary and 14 in branch. During the last three years,
in premium income to 10.58 trillion won in 2008, up from 9.87 a total of six companies either launched operations or took
trillion won in 2007, according to the ﬁnancial regulator. over an existing non-life insurer.
Life insurance products accounted for 81.6% of total Foreign companies have developed their own special- Foreign Insurers in Korea
bancassurance premium income at 8.64 trillion won. Premi- ties in insurance products and sales channels. Kyobo Axa
Insurance companies Count
um income for nonlife policies amounted 1.95 trillion won, and ERGO Daum focus on online auto insurance while AHA
representing 18.4% of total bancassurance sales. and ACE concentrate on providing insurance for personal
Korean subsidiaries Kyobo Axa General Insurance, ERGO Daum Direct Auto Insurance, DAS Legal Expenses 3
A rising number of ﬁnancial institutions, including banks, injury, disease, and travel. Federal and Mitsui deal in liability Insurance
securities firms and mutual savings banks, sell insurance and property insurance while First American Title special-
products in South Korea. In 2008 there was a 7% rise in the izes in real estate title insurance. Cologne Re, meanwhile, Korean branches
number of bancassurance agreements to 630. Of that, life centered on reinsuring life insurance while Swiss Re and
insurance companies saw 8% growth in the number of ban- Tokio Marine focus on reinsuring non-life insurance policies. Primary Insurers American Home Assurance, ACE American Insurance, Federal Insurance, First American 5
Title Insurance, Mitsui Sumitomo Insurance
cassurance agreements to 340. For nonlife insurers, total Foreign non-life insurance companies’ direct written
agreements rose 5% to 290. premiums was 1.34 trillion won in FY2008, commanding a
Dedicated reinsurers Cologne Reinsurance, Swiss Reinsurance, Munich Reinsurance, Tokio Marine & Nichido 7
Bancassurance channels contributed 9.6% of Korea’s 3.6% market share of Korea’s 37.50 trillion won non-life in- Fire Insurance, SCOR Reinsurance Asia Paciﬁc, RGA Reinsurance, Hannover Reinsurance
total 110.14 trillion won in premium income in 2008, up from surance market. Foreign non-life insurance companies’ mar-
9.3% in 2007. Banks accounted for 98.4% of total bancas- ket share grew from 1.4% in FY2006, and 3.0% in FY2007. Dedicated guarantee insurers Genworth Mortgage Insurance, AIG United Guaranty 2
surance sales with a total of 10.4 trillion won in 2008. Though foreign non-life insurance companies posted 64.9
Note 1: Kyobo Auto became Kyobo Axa in May 2007 while Daum Direct became ERGO Daum Direct in June 2008.
In South Korea, insurance companies paid 780.9 billion billion won in operating losses, their net income recorded DAS Legal Expenses Insurance received approval in May 2009 and is expected to start operations in October this year.
won in agency fees for bancassurance partners in 2008, up 17.6 billion won from investment gains of 71.4 billion won. Note 2: As of July 2009, there were a total of 31 non-life insurance companies in Korea, including 14 domestic companies and 17 foreign companies.
Issues and Outlook EUCCK Roundtable
Total assets and premium income growth in the life in- as the ongoing low interest rate policy is forecast to be itability of non-life insurers. As in the case of life insurers, On September 4th, the EUCCK Insurance Committee
surance industry in the third quarter of 2009 are expected extended. To cope better with ﬁnancial instability and low non-life insurers are afraid they will suffer from a decrease organized a roundtable with Insurance Committee’s casual
to slow or event contract due to deteriorating insurance interest rates, life insurers must ﬁnd out and develop alter- in new insurance contracts written and an increase in the round-table dinner with several academics on “The Outlook
and investment business environments following the recent native long term investment tools that are less vulnerable to cancellation and surrendering of insurance contracts result- of the Insurance Industry”.
financial crisis and the resulting recession. In particular, the ﬁnancial market condition. ing from the recession. The guests included Prof. Kim Jae-hyun, Dept of Fi-
there are concerns that the sales of death insurance such The non-life insurance industry is expected to con- In addition, the FSC recently decided to set a maximum nance , Risk Management and Insurance, Sangmyung
as whole life and illness insurance, which account for more tinue its growth trend into the third quarter of 2009, mainly coverage limit for medical insurance, which has been one of University; Prof. Lee Seong-bong, Dept. of International
than half of total insurance premiums, will fall from the drop driven by continued growth in long-term non-life insurance, the key business line for non-life insurers. There are con-
lines Business Administration, Seoul Women’s University; Prof.
in consumers real disposable income. It does not appear although the economic downturn is forecast to persist for insurers will suffer a decrease in demand
cerns that non-life insu Hur Yeon, Dept. of Business and College of Social Science,
that the life insurance industry will see a return to past the time being. In particular, long-term non-life insurance is
nsurance and sales of medical insurance due to this new constraint.
i Chung-Ang University and Prof. Jung Hong-joo Professor
growth levels for the time being, considering the life insurers likely to carry on its strong growth trend by virtue of stead- On the investment business side, non-life insurers, like life
bus of Risk Management and Insurance, SungKyunKwan Univer-
business results tend to lag economic or business indices. ily increasing demand for super personal insurance and
sing insurers, will experience a declining trend in investment in- sity.
According to experts, during the third quarter of 2009, increased sales through GA channel. There nonetheless ex- being.
come for the time being The EUCCK Insurance Committee members engaged in
investment proﬁts of life insurers are expected to decrease,
re ist some negative factors threatening the growth and prof- a passionate discussion with the guests on the insurance
policies of the governments and the problems being faced
by foreign investors in this sector.
Many of them pointed out that the ofﬁce of the ﬁnan-
cial regulator in Korea is much more open, accessible and
transparent than in many other developed countries.
“They are quite open to discussions and are willing to
listen to the concerns of the foreign investors, However,
there continue to be problems in the policies that are being
implemented,” one member said.
The Insurance Industry in Korea is broadly regulated by
two entities. As part of its regulatory oversight, the Financial
Services Commission (FSC) deliberates and decides on
policy matters relating to the inspection and supervision of
ﬁnancial institutions and the securities and futures markets.
The FSC also has the authority to issue and revoke licenses
from ﬁnancial institutions.
The Financial Supervisory Services (FSS) is primarily
responsible for supervision and examination of the regu-
lated ﬁnancial institutions in Korea. It also has the authority
to order the submission of documents, records, or personal
testimony necessary for investigation. Noncompliance or
providing deliberately false statements in an FSS investiga-
tion constitutes an offense punishable under the law. Upon
approval from the FSC, the FSS may also recommend dis-
missal of ofﬁcers and managers of ﬁnancial institutions who
are found to be liable for violation of rules and regulations.
The FSS also serves as a mediator of disputes between
ﬁnancial institutions and investors and depositors and credi-
Some of the participants said that by and large the Ko-
rean authorities are nationalistic and therefore tend to favor
the domestic companies who have a very big inﬂuence. This
is a big disadvantage for foreign insurance companies.
The meeting then proceeded to discuss about the lat-
est policy matters in the sector. Special attention was given
to the policy announcement that insurance companies will
be gradually allowed to use their own tools to calculate the
risk levels of their assets.
With the current ﬁnancial turmoil calling for more ac-
curate tools to estimate the amount of risky assets at insur-
ers for them to weather such hardship, the FSS expects the
measure to help them meet global risk-management stand-
Major local insurers and foreign insurance companies
have been asking the regulator to allow their own tools in
evaluating their risky assets, as ‘Risk-based Capital’ frame-
work became a new norm of the industry from April this
Under the RBC system, all the insurers have to use a
standardized risk coefﬁcient, regardless of unique situation
each company faces. As the level of risk each insurance
firm faces varies, the system has been criticized because
it can lead insurers with a lot of risky assets to have insuf-
ﬁcient capital in reserve, and those with far less risky assets
to have too much capital.
Insurance companies can either remain with the stand-
ardized method or use customized tools from this year, but
each new risk-calculating model must win approval from the
FSS six months before it is launched.
Moreover, substantial changes for Korean insurers, in
terms of regulation, such as expanding business territories
and increasing self-regulation in asset management, are
scheduled to be enforced in the near future. It is important
that they are designed so that the ﬁnancial industry, includ-
ing the insurance industry, will be more competitive in the
long run, while ensuring that stability is maintained, the par-
Among the other matters that came up for discussion
was the review process for new products which is not trans-
parent. Some participants said that it is almost impossible
to get approval from the regulator for new insurance prod-
A lot of discussion also took place about bancassur-
ance which was first introduced in August, 2003, to help
consumers purchase insurance at a lower cost and im-
prove market efﬁciency. The full-ﬂedged implementation of
bankassurance, a combination of banking and insurance
services and other policy measures to promote the devel-
opment of the nation’s insurance policy has sparked ﬁerce
resistance from industry insiders so far.
In light of the potential impact of bancassurance on the
insurance market, a phase-in approach was adopted. How-
ever in recent days, with the conflict between banks and
insures over the expansion of bancassurance intensifying,
the fourth phase was put on hold.
All in all the participants spent a productive evening lis-
tening to experts in the ﬁeld.
EUCCK Insurance Committee members at the Roundtable meeting
Insurance, in law and economics, is a form of risk manage-
The following is a brief description ment primarily used to hedge against the risk of a contin-
gent loss. Insurance is deﬁned as the equitable transfer of
about the principles of insurance, the risk of a loss, from one entity to another, in exchange
for a premium, and can be thought of as a guaranteed and
reproduced from copyright free known small loss to prevent a large, possibly devastating
sources including online encyclopedia An insurer is a company selling the insurance; an in-
sured or policyholder is the person or entity buying the
Wikipedia. insurance. The insurance rate is a factor used to determine
the amount to be charged for a certain amount of insur-
ance coverage, called the premium. Risk management, the
practice of appraising and controlling risk, has evolved as a
discrete ﬁeld of study and practice.
Principles of Insurance losses. There is little point in paying such costs unless the
protection offered has real value to a buyer.
Commercially insurable risks typically share seven com-
mon characteristics. Affordable Premium:
If the likelihood of an insured event is so high, or the
A large number of homogeneous exposure units: cost of the event so large, that the resulting premium is
The vast majority of insurance policies are provided for large relative to the amount of protection offered, it is not
individual members of very large classes. The existence of likely that anyone will buy insurance, even if on offer. Fur-
a large number of homogeneous exposure units allows in- ther, as the accounting profession formally recognizes in
surers to beneﬁt from the so-called “law of large numbers,” ﬁnancial accounting standards, the premium cannot be so
which in effect states that as the number of exposure units large that there is not a reasonable chance of a signiﬁcant
increases, the actual results are increasingly likely to be- loss to the insurer. If there is no such chance of loss, the
come close to expected results. There are exceptions to transaction may have the form of insurance, but not the
this criterion. Lloyd’s of London is famous for insuring the substance.
life or health of actors, actresses and sports ﬁgures. Satel-
lite Launch insurance covers events that are infrequent. Calculable Loss:
Large commercial property policies may insure exceptional There are two elements that must be at least estimable,
properties for which there are no ‘homogeneous’ exposure if not formally calculable: the probability of loss, and the
units. Despite failing on this criterion, many exposures like attendant cost. Probability of loss is generally an empiri-
these are generally considered to be insurable. cal exercise, while cost has more to do with the ability of a
reasonable person in possession of a copy of the insurance
Deﬁnite Loss: policy and a proof of loss associated with a claim presented
The event that gives rise to the loss that is subject to under that policy to make a reasonably deﬁnite and objec-
the insured, at least in principle, take place at a known time, tive evaluation of the amount of the loss recoverable as a
in a known place, and from a known cause. The classic ex- result of the claim.
ample is death of an insured person on a life insurance pol-
icy. Fire, automobile accidents, and worker injuries may all Limited risk of catastrophically large losses:
easily meet this criterion. Other types of losses may only be The essential risk is often aggregation. If the same
deﬁnite in theory. Occupational disease, for instance, may event can cause losses to numerous policyholders of the
involve prolonged exposure to injurious conditions where no same insurer, the ability of that insurer to issue policies be-
speciﬁc time, place or cause is identiﬁable. Ideally, the time, comes constrained, not by factors surrounding the individu-
place and cause of a loss should be clear enough that a al characteristics of a given policyholder, but by the factors
reasonable person, with sufﬁcient information, could objec- surrounding the sum of all policyholders so exposed. Typi-
tively verify all three elements. cally, insurers prefer to limit their exposure to a loss from a
single event to some small portion of their capital base, on
Accidental Loss: the order of 5 percent. Where the loss can be aggregated,
The event that constitutes the trigger of a claim should or an individual policy could produce exceptionally large
be fortuitous, or at least outside the control of the beneﬁci- claims, the capital constraint will restrict an insurer’s ap-
ary of the insurance. The loss should be ‘pure,’ in the sense petite for additional policyholders. The classic example is
that it results from an event for which there is only the op- earthquake insurance, where the ability of an underwriter to
portunity for cost. Events that contain speculative elements, issue a new policy depends on the number and size of the
such as ordinary business risks, are generally not consid- policies that it has already underwritten. Wind insurance in
ered insurable. hurricane zones, particularly along coast lines, is another
example of this phenomenon. In extreme cases, the aggre-
Large Loss: gation can affect the entire industry, since the combined
The size of the loss must be meaningful from the per- capital of insurers and reinsurers can be small compared
spective of the insured. Insurance premiums need to cover to the needs of potential policyholders in areas exposed to
both the expected cost of losses, plus the cost of issuing aggregation risk. In commercial ﬁre insurance it is possible
and administering the policy, adjusting losses, and supply- to ﬁnd single properties whose total exposed value is well
ing the capital needed to reasonably assure that the insurer in excess of any individual insurer’s capital constraint. Such
will be able to pay claims. For small losses these latter properties are generally shared among several insurers, or
costs may be several times the size of the expected cost of are insured by a single insurer who syndicates the risk into
the reinsurance market.
Indemniﬁcation Insurers’ Business Model
The technical deﬁnition of “indemnity” means to make Underwriting and Investing
whole again. There are two types of insurance contracts; The business model can be reduced to a simple equation:
an “indemnity” policy and a “pay on behalf” or “on behalf Profit = earned premium + investment income - incurred
of” policy. The difference is signiﬁcant on paper, but rarely loss - underwriting expenses.
material in practice.
An “indemnity” policy will never pay claims until the Insurers make money in two ways:
insured has paid out of pocket to some third party; for ex- · Through underwriting, the process by which insurers
ample, a visitor to your home slips on a ﬂoor that you left select the risks to insure and decide how much in pre-
wet and sues you for $10,000 and wins. Under an “indem- miums to charge for accepting those risks;
nity” policy the homeowner would have to come up with · By investing the premiums they collect from insured
the $10,000 to pay for the visitor’s fall and then would be parties.
“indemniﬁed” by the insurance carrier for the out of pocket
costs (the $10,000). The most complicated aspect of the insurance busi-
Under the same situation, a “pay on behalf” policy, the ness is the underwriting of policies. Using a wide assort-
insurance carrier would pay the claim and the insured (the ment of data, insurers predict the likelihood that a claim will
homeowner) would not be out of pocket for anything. Most be made against their policies and price products accord-
modern liability insurance is written on the basis of “pay on ingly. To this end, insurers use actuarial science to quantify
behalf” language. the risks they are willing to assume and the premium they
An entity seeking to transfer risk (an individual, corpo- will charge to assume them. Data is analyzed to fairly ac-
ration, or association of any type, etc.) becomes the ‘insured’ curately project the rate of future claims based on a given
party once risk is assumed by an ‘insurer’, the insuring risk. Actuarial science uses statistics and probability to ana-
party, by means of a contract, called an insurance ‘policy’. lyze the risks associated with the range of perils covered,
Generally, an insurance contract includes, at a minimum, and these scientiﬁc principles are used to determine an in-
the following elements: the parties (the insurer, the insured, surer’s overall exposure. Upon termination of a given policy,
the beneficiaries), the premium, the period of coverage, the amount of premium collected and the investment gains
the particular loss event covered, the amount of coverage thereon minus the amount paid out in claims is the insurer’s
(i.e., the amount to be paid to the insured or beneﬁciary in underwriting proﬁt on that policy.
the event of a loss), and exclusions (events not covered). Of course, from the insurer’s perspective, some policies
An insured is thus said to be “indemniﬁed” against the loss are “winners” (i.e., the insurer pays out less in claims and
covered in the policy. expenses than it receives in premiums and investment in-
When insured parties experience a loss for a speciﬁed come) and some are “losers” (i.e., the insurer pays out more
peril, the coverage entitles the policyholder to make a ‘claim’ in claims and expenses than it receives in premiums and
against the insurer for the covered amount of loss as speci- investment income); insurance companies essentially use
ﬁed by the policy. The fee paid by the insured to the insurer actuarial science to attempt to underwrite enough “winning”
for assuming the risk is called the ‘premium’. Insurance policies to pay out on the “losers” while still maintaining
premiums from many insureds are used to fund accounts proﬁtability.
reserved for later payment of claims—in theory for a rela- An insurer’s underwriting performance is measured in
tively few claimants—and for overhead costs. So long as an its combined ratio. The loss ratio (incurred losses and loss-
insurer maintains adequate funds set aside for anticipated adjustment expenses divided by net earned premium) is
losses (i.e., reserves), the remaining margin is an insurer’s added to the expense ratio (underwriting expenses divided
proﬁt. by net premium written) to determine the company’s com-
bined ratio. The combined ratio is a reﬂection of the com-
pany’s overall underwriting proﬁtability. A combined ratio of
less than 100 percent indicates underwriting profitability,
while anything over 100 indicates an underwriting loss.
Insurance companies also earn investment profits on The most complicated aspect
“ﬂoat”. “Float” or available reserve is the amount of money,
at hand at any given moment, that an insurer has collected of the insurance business is the
in insurance premiums but has not been paid out in claims.
Insurers start investing insurance premiums as soon as underwriting of policies.
they are collected and continue to earn interest on them not believe that it is forever possible to sustain a proﬁt from
until claims are paid out. The Association of British Insurers ﬂoat without an underwriting proﬁt as well, but this opinion
(gathering 400 insurance companies and 94% of UK insur- is not universally held. Naturally, the “ﬂoat” method is difﬁ-
ance services) has almost 20% of the investments in the cult to carry out in an economically depressed period. Bear
London Stock Exchange. markets do cause insurers to shift away from investments
In the United States, the underwriting loss of property and to toughen up their underwriting standards. So a poor
and casualty insurance companies was $142.3 billion in economy generally means high insurance premiums. This
the ﬁve years ending 2003. But overall proﬁt for the same tendency to swing between proﬁtable and unproﬁtable pe-
period was $68.4 billion, as the result of ﬂoat. Some insur- riods over time is commonly known as the “underwriting” or
ance industry insiders, most notably Hank Greenberg, do insurance cycle.
Property and casualty insurers currently make the most In managing the claims handling function, insurers seek
money from their auto insurance line of business. Generally to balance the elements of customer satisfaction, adminis-
better statistics are available on auto losses and under- trative handling expenses, and claims overpayment leakag-
writing on this line of business has beneﬁted greatly from es. As part of this balancing act, fraudulent insurance prac-
advances in computing. Additionally, property losses in the tices are a major business risk that must be managed and
United States, due to unpredictable natural catastrophes, overcome. Disputes between insurers and insureds over the
have exacerbated this trend. validity of claims or claims handling practices occasionally
escalate into litigation; see insurance bad faith.
Claims and loss handling is the materialized utility of Any risk that can be quantified can potentially be in-
insurance; it is the actual “product” paid for, though one sured. Speciﬁc kinds of risk that may give rise to claims are
hopes it will never need to be used. Claims may be filed known as “perils”. An insurance policy will set out in detail
by insureds directly with the insurer or through brokers or which perils are covered by the policy and which are not. A
agents. The insurer may require that the claim be ﬁled on its single policy may cover risks in one or more of the catego-
own proprietary forms, or may accept claims on a standard ries set out below. For example, auto insurance would typi-
industry form such as those produced by ACORD. cally cover both property risk (covering the risk of theft or
Insurance company claim departments employ a large damage to the car) and liability risk (covering legal claims
number of claims adjusters supported by a staff of records from causing an accident). A homeowner’s insurance policy
management and data entry clerks. Incoming claims are in the U.S. typically includes property insurance covering
classiﬁed based on severity and are assigned to adjusters damage to the home and the owner’s belongings, liability
whose settlement authority varies with their knowledge and insurance covering certain legal claims against the owner,
experience. The adjuster undertakes a thorough investiga- and even a small amount of coverage for medical expenses
tion of each claim, usually in close cooperation with the of guests who are injured on the owner’s property.
insured, determines its reasonable monetary value, and Business insurance can be any kind of insurance that
authorizes payment. Adjusting liability insurance claims is protects businesses against risks. Some principal subtypes
particularly difﬁcult because there is a third party involved of business insurance are (a) the various kinds of profes-
(the plaintiff who is suing the insured) who is under no con- sional liability insurance, also called professional indemnity
tractual obligation to cooperate with the insurer and in fact insurance, which are discussed below under that name; and
may regard the insurer as a deep pocket. The adjuster must (b) the business owner’s policy (BOP), which bundles into
obtain legal counsel for the insured (either inside “house” one policy many of the kinds of coverage that a business
counsel or outside “panel” counsel), monitor litigation that owner needs, in a way analogous to how homeowners insur-
may take years to complete, and appear in person or over ance bundles the coverage that a homeowner needs.
the telephone with settlement authority at a mandatory set-
tlement conference when requested by the judge.
History of Insurance
In some sense we can say that insurance was registered in special ofﬁces. will was signed and sealed on 17 November
appears simultaneously with the appear- The purpose of registering was that 1628 but not proved until 1633.
ance of human society. We know of two whenever the person who presented the Toward the end of the seventeenth
types of economies in human societies: gift registered by the court was in trouble, century, London’s growing importance as
money economies (with markets, money, the monarch and the court would help him. a centre for trade increased demand for
financial instruments and so on) and non- Jahez, a historian and writer, writes in one marine insurance. In the late 1680s, Edward
money or natural economies (without of his books on ancient Iran: “[W]henever Lloyd opened a coffee house that became
money, markets, financial instruments and the owner of the present is in trouble or a popular haunt of ship owners, merchants,
so on). The second type is a more ancient wants to construct a building, set up a feast, and ships’ captains, and thereby a reliable
form than the ﬁrst. In such an economy and have his children married, etc. the one in source of the latest shipping news. It be-
community, we can see insurance in the charge of this in the court would check came the meeting place for parties wish-
form of people helping each other. For ex- the registration. If the registered amount ing to insure cargoes and ships, and those
ample, if a house burns down, the members exceeded 10,000 Derrik, he or she would willing to underwrite such ventures. Today,
of the community help build a new one. receive an amount of twice as much.” Lloyd’s of London remains the leading mar-
Should the same thing happen to one’s A thousand years later, the inhabit- ket (note that it is not an insurance com-
neighbor, the other neighbors must help. ants of Rhodes invented the concept of the pany) for marine and other specialist types
Otherwise, neighbors will not receive help ‘general average’. Merchants whose goods of insurance, but it works rather differently
in the future. This type of insurance has were being shipped together would pay a than the more familiar kinds of insurance.
survived to the present day in some coun- proportionally divided premium which would Insurance as we know it today can be
tries where modern money economy with be used to reimburse any merchant whose traced to the Great Fire of London, which
its ﬁnancial instruments is not widespread. goods were jettisoned during storm or sink- in 1666 devoured 13,200 houses. In the
Turning to insurance in the modern age. aftermath of this disaster, Nicholas Bar-
sense (i.e., insurance in a modern money The Greeks and Romans introduced bon opened an office to insure buildings.
economy, in which insurance is part of the the origins of health and life insurance c. In 1680, he established England’s first fire
ﬁnancial sphere), early methods of transfer- 600 AD when they organized guilds called insurance company, “The Fire Office,” to
ring or distributing risk were practised by “benevolent societies” which cared for the insure brick and frame homes.
Chinese and Babylonian traders as long families and paid funeral expenses of mem- The first insurance company in the
ago as the 3rd and 2nd millennia BC, re- bers upon death. Guilds in the Middle Ages United States underwrote fire insurance
spectively. Chinese merchants travelling served a similar purpose. The Talmud deals and was formed in Charles Town (modern-
treacherous river rapids would redistribute with several aspects of insuring goods. Be- day Charleston), South Carolina, in 1732.
their wares across many vessels to limit fore insurance was established in the late Benjamin Franklin helped to popularize and
the loss due to any single vessel’s capsiz- 17th century, “friendly societies” existed in make standard the practice of insurance,
ing. The Babylonians developed a system England, in which people donated amounts particularly against ﬁre in the form of per-
which was recorded in the famous Code of of money to a general sum that could be petual insurance. In 1752, he founded the
Hammurabi, c. 1750 BC, and practised by used for emergencies. Philadelphia Contributionship for the Insur-
early Mediterranean sailing merchants. If a Separate insurance contracts (i.e., in- ance of Houses from Loss by Fire. Franklin’s
merchant received a loan to fund his ship- surance policies not bundled with loans or company was the first to make contribu-
ment, he would pay the lender an additional other kinds of contracts) were invented in tions toward fire prevention. Not only did
sum in exchange for the lender’s guarantee Genoa in the 14th century, as were insur- his company warn against certain fire
to cancel the loan should the shipment be ance pools backed by pledges of landed hazards, it refused to insure certain build-
stolen or lost at sea. estates. These new insurance contracts ings where the risk of fire was too great,
Achaemenian monarchs of Ancient allowed insurance to be separated from such as all wooden houses. In the United
Persia were the ﬁrst to insure their people investment, a separation of roles that first States, regulation of the insurance industry
and made it ofﬁcial by registering the insur- proved useful in marine insurance. Insur- is highly Balkanized, with primary responsi-
ing process in governmental notary ofﬁces. ance became far more sophisticated in bility assumed by individual state insurance
The insurance tradition was performed post-Renaissance Europe, and specialized departments. Whereas insurance markets
each year in Norouz (beginning of the Irani- varieties developed. have become centralized nationally and
an New Year); the heads of different ethnic Some forms of insurance had devel- internationally, state insurance commission-
groups as well as others willing to take part, oped in London by the early decades of the ers operate individually, though at times in
presented gifts to the monarch. The most seventeenth century. For example, the will concert through a national insurance com-
important gift was presented during a spe- of the English colonist Robert Hayman men- missioners’ organization. In recent years,
cial ceremony. When a gift was worth more tions two “policies of insurance” taken out some have called for a dual state and fed-
than 10,000 Derrik (Achaemenian gold with the diocesan Chancellor of London, eral regulatory system (commonly referred
coin) the issue was registered in a special Arthur Duck. Of the value of £100 each, to as the Optional federal charter (OFC))
ofﬁce. This was advantageous to those who one relates to the safe arrival of Hayman’s for insurance similar to that which oversees
presented such special gifts. For others, the ship in Guyana and the other is in regard to state banks and national banks.
presents were fairly assessed by the con- “one hundred pounds assured by the said
fidants of the court. Then the assessment Doctor Arthur Ducke on my life”. Hayman’s Source: Wikipedia
The European Commission has adopted By purchasing insurance, private customers or companies
transfer risk that may arise from their personal or business
The fact that the service provided by the insurer de-
pends on an uncertain factor, i.e. the occurrence of the
activities to another party, the insurance company. The in- insured risk, is the crucial characteristic of the insurance
a report on the functioning of the surance company is better able to manage and absorb the industry. Cooperation amongst insurers in order to spread
risk due to the fact that it is aggregating risks from a large risks and to acquire a better knowledge of them is there-
Insurance Block Exemption Regulation number of customers, which leads to a much less risky fore a common feature of the industry.
stream of losses. Moreover, the insurance company has a As early as 1972, the European Commission stated
(BER). The BER, which will expire on 31 better knowledge of the risk in question (the probability of a
speciﬁc event occurring as well as the severity of the losses
in its Second Report on Competition Policy that the EC
Treaty competition rules applied to the insurance industry.
March 2010, exempts certain agreements that can be incurred). Insurance companies also offer to
their clients additional services, such as loss prevention and
The Court conﬁrmed that the industry should be subject to
these rules in the Verband der Sacheversicherer judgement.
between insurance companies from EC safety advice, loss settlement advice and other legal servic-
es. The risk transfer mechanism and the related services are
In this judgement, the Court rejected the argument that
unlimited competition would increase the risk of insolvency
greatly beneﬁcial to private customers and business. In par- to the detriment of consumers and that, as cooperation
Treaty antitrust rules’ ban on restrictive ticular, as far as business is concerned, the transfer of risks between insurers was required to avoid such a risk, special
associated with commercial and investment activities allows rules should be adopted under Article 83 EC.
business practices. the economy as a whole to be more enterprising.
On 24th March 2009, the Commission adopted the Re- Furthermore the Commission considers at this stage of
port to the European Parliament and Council. the Review that even if the risk of non-cooperation in these
The Sector Inquiry Report contained an extensive ac- two areas may be low, the possibility that such pro-compet-
count of how insurance markets are organized in the EU, itive cooperation may diminish, should be avoided.
including a significant amount of original research by the Cooperation on SPCs does not appear to be specific
Commission services during the inquiry, which will not be to the insurance sector and as such does not necessarily
repeated here. However, it is useful to recall briefly some require a sector speciﬁc BER. Nor does there appear to be
salient features. a signiﬁcant risk of less or non-cooperation on SPCs in the
Primary insurance markets for most risks tend to be event of non-renewal of the BER. The Commission therefore
national in scope, even when they are primarily served by proposes not to renew the BER for SPCs. Further guid-
consolidated multinational insurance groups. This is for a ance on SPCs may be envisaged by the Commission if non-
variety of reasons, of which the most important is probably renewal is the ﬁnal decision.
the fact that insurance contracts are written under, and Agreements in relation to security devices appear to
subject to, general national contract law as well as speciﬁc give rise to concerns in relation to both competition and the
insurance law, and that liability issues similarly arise under development of the EU’s internal market. Moreover, they do
national law which may substantially vary from one jurisdic- not appear speciﬁc to the insurance sector.
tion to another. In addition, there is a need for a local pres- The Commission therefore proposes non-renewal of the
ence, often for distribution and always for claims settlement, BER for this category of agreements. However, insurers will
and language issues may arise. It is natural thus to charac- beneﬁt from guidance in terms of applicability or otherwise
terize the organization of the market as multi-domestic and of Article 81 of the Treaty to their agreements on security
to exclude, in many cases, the possibility of any competitive devices, afforded by the general standardization chapter in
constraint from cross-border providers short of actual entry. the Horizontal Guidelines which are currently under review.
The mode of entry for insurers seeking to enter new
markets has, to date, usually been through acquisition of a
local company which becomes a subsidiary of the acquirer.
Greenfield entry is uncommon. National markets tend as
a consequence to be quite concentrated, especially in the
major categories of risk.
The insurance industry has tended not to be examined
outside the industry with the same degree of interest as
other areas of ﬁnancial services. This is likely gradually to
change, with the Commission’s work on Solvency , the In-
surance Mediation Directive and the BER particularly in the
forefront of the debate.
Insurance Block Exemption Regulation The Commission has come to the preliminary conclu-
sion that there are good reasons to protect or facilitate the
After granting two individual exemptions in 1990, the Six years after its entry into force, the Commission is re- agreements on cooperation in the area of joint calculations,
Commission adopted a Block Exemption Regulation in 1992 quired under the Implementing Regulation to submit a tables and studies, that the current BER is doing this ef-
and, when this Regulation expired at the end of March 2003, report to the European Parliament and Council on the func- fectively and should therefore be renewed. The Commission
the Commission replaced it with a Regulation adopted tioning of the Block Exemption Regulation together with has not yet decided whether to amend the structure or
after in-depth consultation with the insurance sector, con- any proposals for amendment in the light of experience. drafting of the current exemption. However, in terms of im-
sumer organizations and public sector bodies. The Regula- The Commission therefore began its review of the func- proving it, a range of options would be considered.
tion grants an exemption to the application of competition tioning of the Insurance Block Exemption Regulation in April The Commission’s view at this stage is that pools are
rules to certain types of agreements in the insurance sec- 2008, when it launched a Consultation. In addition to the also speciﬁc to the insurance sector and that there are sev-
tor, namely agreements on: Consultation, the Commission sent targeted questionnaires eral arguments in favor of the necessity of a BER in order
to certain stakeholders, public authorities and consumer to protect or facilitate such agreements. The Commission
· Joint calculations, tables and studies organizations. The Consultation closed in July 2008 having therefore proposes to renew the BER in relation to pools.
· Standard policy conditions and models on proﬁts received 60 replies. Following closure of the Consultation, However, the Commission would be likely to significantly
· Common coverage of certain types of risks (pools) the Commission sent follow-up questionnaires to certain redraft the wording of the chapter in question in order to
· Security devices / safety equipment stakeholders including small and medium-sized insurers, take on board many of the comments received during the
pools and producer federations of security devices. The Review and also to make it consistent with other general
This Regulation is valid for seven years and will expire in EU National Competition Authorities, have been closely in- and sector-speciﬁc legislation.
2010. volved in the Review.
In Focus Ease of Doing Business
Ease of Doing
Business In the World Bank’s annual report measuring the ease of
Doing Business 2010: doing business Korea ranked 19 th out of 183 countries
climbing four steps higher than last year’s 23rd . This year’s
Reforming Through ranking is also the nation’s highest ever.
The report evaluates ten business-related indices of
Difﬁcult Times is which, the nation especially made strides in launching
and operating businesses and cross border trading. Korea
the seventh in a series marked 53rd in starting a business, a major jump from 126th
a year ago. And in trading across borders Seoul came in 8th
of annual reports by place four notches higher than 2008. The average ranking
for members of the Organization for Economic Cooperation
and Development stood at 30th place.
the World Bank, Singapore was the top-ranked economy in terms of the
ease of doing business with New Zealand and Hong Kong
investigating regulations right behind.
The government says the rise in rankings is encourag-
that enhance business ing as the Lee Myung-bak administration has been pushing
to create a pro-business environment since taking office
activity and those last year.
This section therefore takes a look at the methodology
that constrain it. and findings of the report, not just with respect to Korea,
but for all the countries in the world, which were evaluated.
Doing Business presents quantitative indicators on busi-
According to it, Korea ness regulations and the protection of property rights that
can be compared across 183 economies, from Afghanistan
is making headway to Zimbabwe, over time.
A set of regulations affecting 10 stages of a business’s
as a business-friendly life are measured: starting a business, dealing with con-
struction permits, employing workers, registering property,
environment. getting credit, protecting investors, paying taxes, trading
across borders, enforcing contracts and closing a business.
Data in Doing Business 2010: Reforming Through Difficult
Times are current as of June 1st, 2009. The indicators are
used to analyze economic outcomes and identify what re-
forms have worked, where, and why.
In Focus Ease of Doing Business
Starting a Business in the Republic of Korea
Starting a Business data Doing Business 2008 Doing Business 2009 Doing Business 2010
Rank · 133 53
Procedures (number) 10 10 8
Time (days) 17 17 14
Cost (% of income per capita) 17.1 16.9 14.7
Min. capital (% of income per capita) 296.0 268.9 0.0
Procedures (number) Time (days)
The Doing Business methodology has limitations. Other Korea, Rep.’s ranking in Doing Business 2010 2007 2008 2009 2007 2008 2009
areas important to business such as an economy’s proxim-
Rank Doing Business 2010
ity to large markets, the quality of its infrastructure services
(other than those related to trading across borders), the Ease of Doing Business 19
security of property from theft and looting, the transparency
Starting a Business 53
of government procurement, macroeconomic conditions Cost (% of income per capita) Min. capita (% of income per capita)
or the underlying strength of institutions, are not studied Dealing with Construction Permits 23
directly by Doing Business. To make the data comparable 20 400
across economies, the indicators refer to a specific type Employing Workers 150
of business, generally a local limited liability company op- Registering Property 71 15 300
erating in the largest business city. Because standard as-
sumptions are used in the data collection, comparisons and Getting Credit 15
benchmarks are valid across economies. The data not only Protecting Investors 73
highlight the extent of obstacles to doing business; they
also help identify the source of those obstacles, supporting Paying Taxes 49
policymakers in designing reform.
Trading Across Borders 8
The data set covers 183 economies: 46 in Sub-Saharan
Africa, 32 in Latin America and The Caribbean, 27 in East- Enforcing Contracts 5 0 0
ern Europe and Central Asia, 24 in East Asia and Paciﬁc, 19 2007 2008 2009 2007 2008 2009
Closing a Business 12
in the Middle East and North Africa and 8 in South Asia, as
well as 27 OECD high-income economies as benchmarks.
The following tables about Korea’s ranking are self-
explanatory. Korea Rep. OECD
In Focus Ease of Doing Business
Dealing with Construction Permits in the Republic of Korea Trading Across Borders in the Republic of Korea
Dealing with Construction Permits data Doing Business 2008 Doing Business 2009 Doing Business 2010 Trading Across Borders data Doing Business 2008 Doing Business 2009 Doing Business 2010
Rank · 23 23 Rank · 12 8
Procedures (number) 13 13 13 Cost to export (US$ per container) 745 767 742
Time (days) 34 34 34 Cost to import (US$ per container) 745 747 742
Cost (% of income per capita) 170.2 154.6 135.6 Documents to export (number) 4 4 3
Documents to import (number) 6 6 3
Time to export (days) 11 8 8
Employing Workers in the Republic of Korea Time to import (days) 10 8 8
Employing Workers data Doing Business 2008 Doing Business 2009 Doing Business 2010
Rank · 149 150
Procedures (number) · 91 91 Enforcing Contracts in the Republic of Korea
Time (days) · 38 38 Enforcing Contracts data Doing Business 2008 Doing Business 2009 Doing Business 2010
Rank · 7 5
Procedures (number) 35 35 35
Registering Property in the Republic of Korea Time (days) 230 230 230
Registering Property data Doing Business 2008 Doing Business 2009 Doing Business 2010 Cost (% of claim) 10.3 10.3 10.3
Rank · 65 71
Procedures (number) 7 7 7
Closing Business in the Republic of Korea
Time (days) 11 11 11
Closing Business data Doing Business 2008 Doing Business 2009 Doing Business 2010
Cost (% of property value) 5.1 5.1 5.1
Rank · 12 12
Time (years) 1.5 1.5 1.5
Getting Credit in the Republic of Korea Cost (% of claim) 4 4 4
Recoverty Rate (cents on the dollar) 81.2 80.5 80.5
Getting Credit data Doing Business 2008 Doing Business 2009 Doing Business 2010
Rank · 12 15
Strength of legal rights index (0-10) 7 7 7
Depth of credit information index (0-6) 5 6 6 Doing Business
Private bureau coverage (% of adults) 0.0 90.4 93.8
As the report notes, the past year was a tough one for “Doing Business recorded 287 such reforms in 131
Public registry coverage (% of adults) 74.2 0.0 0.0
doing business. Firms around the world had to cope with economies between June 2008 and May 2009, 20% more
the effects of a ﬁnancial crisis that started in rich econo- than in the year before. Reformers focused on making it
mies but led to a global economic downturn. Access to easier to start and operate a business, strengthening prop-
Protecting Investors in the Republic of Korea ﬁnance became more difﬁcult. Demand for many products erty rights and improving the efﬁciency of commercial dis-
Protecting Investors data Doing Business 2008 Doing Business 2009 Doing Business 2010 fell in domestic and international markets, and trade slowed pute resolution and bankruptcy procedures.
Rank · 70 73 globally. Policy makers and governments also faced big Reforming business regulation on its own is not a rec-
challenges—from stabilizing the ﬁnancial sector and restor- ipe for recovery from ﬁnancial or economic distress. Many
Strength of investor protection index (0-10) 5.3 5.3 5.3
ing confidence and trust to countering rising unemploy- other factors come into play. The Doing Business indicators
ment and providing necessary safety nets as an estimated do not assess market regulation or the strength of the ﬁ-
50 million people risked losing their jobs as a result of the nancial infrastructure, both important factors in understand-
Paying Taxes in the Republic of Korea crisis. And all this in the face of rising public debt as ﬁscal ing some of the underlying causes of the global financial
Paying Taxes data Doing Business 2008 Doing Business 2009 Doing Business 2010 stimulus packages collided with tightening ﬁscal revenues. crisis. Nor do they account for other factors important for
Despite the many challenges, in 2008/09 more govern- business at any time, such as macroeconomic conditions,
Rank · 45 49
ments implemented regulatory reforms aimed at making infrastructure, workforce skills or security.
Total tax rate (% proﬁt) 31.2 33.5 31.9
it easier to do business than in any year since 2004, when But the regulatory environment for businesses can in-
Payments (number per year) 14 14 14 Doing Business started to track reforms through its indica- ﬂuence how well ﬁrms cope with the crisis and are able to
Time (hours per year) 290 250 250 tors. seize opportunities when recovery begins. Where business
In Focus Ease of Doing Business
regulation is transparent and efﬁcient, it is easier for ﬁrms to ened minority shareholder protections. Entrepreneurs can on the ease of doing business does not tell the whole story
reorient themselves and for new ﬁrms to start up. Efﬁcient now start a business in 2 procedures and 3 days. Related about its business environment.
court and bankruptcy procedures help ensure that assets party transactions are subject to stricter approval and dis- And opportunities for reform remain— Liberia, for exam-
can be reallocated quickly. And strong property rights and closure requirements. Legal provisions determining direc- ple, still ranks 149, and Tajikistan 152. Yet an improvement
investor protections can help establish the basis for trust tors’ liability in case of prejudicial transactions between in this ranking does indicate that the government is taking
when investors start investing again. interested parties were also tightened. action to make the local regulatory environment more con-
Recognizing the importance of firms—especially small Rwanda improved regulations to ease access to credit ducive to doing business.
and mediumsize enterprises—for creating jobs and revenue, through 2 new laws. Its new secured transactions act facili- Such reforms are as timely as ever. Many ﬁrms in devel-
some governments, including those of China, the Republic tates secured lending by allowing a wider range of assets to oping economies have been affected by lower demand for
of Korea, Malaysia and the Russian Federation, have includ- be used as collateral. their exports and a drop in capital ﬂows and remittances. At
ed reforms of business regulation in their economic recov- The law also makes out-of-court enforcement of mov- the same time businesses in low-income economies on av-
ery plans. able collateral available to secured creditors and gives them Reforms also included erage still face more than twice the regulatory burden that
But most reforms recorded in 2008/09 were part of absolute priority within bankruptcy. Rwanda’s new insolven- their counterparts in high-income economies do when start-
longer-term efforts to increase competitiveness and en- cy law streamlined reorganization procedures. measures to speed ing a business, transferring property, ﬁling taxes or resolving
courage ﬁrm and job creation by improving the regulatory Reforms also included measures to speed up trade and a commercial dispute through the courts. Only 2% of adults
environment for businesses.
And most took place in developing economies.
property registration. Delays at the borders were reduced
thanks to longer operating hours and simpler requirements
up trade and property on average have a credit history in low-income economies,
compared with 52% of adults in high-income economies.
Low- and lower-middle-income economies accounted
for two-thirds of reforms recorded by Doing Business in
Reforms removed bottlenecks at the property regis-
registration. Developed economies have on average 10 times as
many newly registered firms per adult as Africa and the
2008/09, continuing a trend that started 3 years ago. In- try and the revenue authority, reducing the time required Middle East—and a business density 4 times that in devel-
deed, three-quarters of such economies covered by Doing to register property by 255 days. Five other low- or lower- oping economies.
Business reformed. And for the first time a Sub-Saharan middle-income economies—the Arab Republic of Egypt, Regulatory burdens can push ﬁrms—and employment—
African economy, Rwanda, led the world in Doing Business Liberia, Moldova, the Kyrgyz Republic and Tajikistan—joined into the informal sector. There, ﬁrms are not registered, do
reforms. Rwanda on the list of global top reformers. These top 10 re- not pay taxes and have limited access to formal credit and
Rwanda has steadily reformed its commercial laws and formers are economies that, thanks to reforms in 3 or more institutions— and workers do not beneﬁt from the protec-
institutions since 2001. In the past year it introduced a new of the 10 areas covered by Doing Business, improved the tions that the law provides. The global crisis is expected to
company law that simpliﬁed business start-up and strength- most on the ease of doing business. An economy’s ranking further increase informal activity. Almost two-thirds of the
In Focus Ease of Doing Business
world’s workers are already estimated to be employed in the in the growth rate and 0.27 percentage points in the invest-
informal sector. ment rate.
Most are in low- and lower-middle-income economies.
And a disproportionate share are from already vulnerable
groups, such as youth and women. Most Doing Business Inspired by Neighbors,
reforms in developing economies still focus on cutting red Reformers Pick Up the Pace
tape and simplifying bureaucratic formalities. Over the past
6 years 80% of reforms in low- and lower-middle-income In 2008/09 Doing Business reforms picked up around
economies were aimed at reducing the administrative bur- the world, with at least 60% of economies reforming in eve-
den for ﬁrms, mostly by easing business start-up and trade. ry region. Reformers were particularly active in 2 regions,
This makes sense and addresses important needs. When in- Eastern Europe and Central Asia and the Middle East and
formal ﬁrms were asked in 2008 about obstacles to formally North Africa. In both, competition among neighbors played
registering their business, 67% in Côte d’Ivoire and 57% in a part in motivating reforms.
Madagascar cited registration fees as a major or very se- Economies in Eastern Europe and Central Asia, the
vere obstacle. region most affected by the crisis, were the most active re-
In easing business start-up and trade, much can be formers for the sixth year in a row. Twenty-six of the region’s
achieved through cost-effective administrative reforms. The 27 economies reformed business regulation in at least one
one-stop shop for starting a business in Burkina Faso cost area covered by Doing Business. In 2004/05 and 2005/06
$200,000. Azerbaijan’s cost $5 million. And the costs are the 10 European Union accession economies accounted for
far outweighed by the estimated savings for businesses— 84 reforms, 60% of the total in the region. Others followed,
estimated at $1.7 million a year in Burkina Faso, $8.4 million with some good results. Since 2004 private credit bureaus
in Azerbaijan. Efﬁcient systems also facilitate enforcement, have Today 94% of adults in Serbia, 77% in Croatia and 30%
a particular challenge in many developing economies where in Kazakhstan and Romania have a credit history. Five years
resources are scarce. Risk-based inspection systems at ago, none did. Enterprise surveys show that in 2008 fewer
customs or in the construction sector allow public ofﬁcials than 6% of firms expected to make informal payments to
to focus their resources and attention where they are most get things done in Estonia, Slovenia and the Slovak Repub-
needed. lic—a far cry from the 18%, 14% and 33% in 2005. In the
Some reforming governments have gone further, intro- past 3 years reforms have been moving eastward from the
ducing new legislation to strengthen property rights and European Union. Albania, Belarus, the Kyrgyz Republic and
increase legal protections for investors. the former Yugoslav Republic of Macedonia implemented
Several post-conﬂict economies, including Afghanistan, reforms in several areas for the third year in row. Inspired Times of Crisis — An Opportunity for Reform
Rwanda and Sierra Leone, introduced new company and by their neighbors, Kazakhstan, Montenegro and Tajikistan
collateral laws, laying the legal foundations for future mar- increased reform efforts this past year. Guatemala and Peru each reformed in at least 4 areas. And Regulatory reform can be difficult and take time, par-
kets. Governments in the Middle East and North Africa are 3 Caribbean island states reformed for the ﬁrst time—Gre- ticularly if legal changes are involved. Some reforms also
Of course, many challenges remain. Banks in Afghani- now reforming at a rate similar to those in Eastern Europe nada, St. Kitts and Nevis and St. Lucia. require difﬁcult political trade-offs. It is not surprising that
stan will not increase secured lending tomorrow just be- and Central Asia . Seventeen of 19 economies reformed In Sub-Saharan Africa 29 of 46 economies reformed in most reforms recorded by Doing Business in 2008/09
cause of new legislation on the use of movable collateral. in 2008/09. Egypt, Jordan and the United Arab Emirates 2008/09, implementing 67 reforms. As in the previous year, were aimed at reducing administrative burdens. At least 30
To be effective, new legislation must be well publicized and were among the most active reformers. In recent years nearly half the reforms in the region focused on making it economies improved processes for construction permit-
adopted by both the public and the private sector. economies in the region have increasingly picked up reform easier to start a business or trade across borders. In South ting, property registration or trading across borders, while
Moreover, regulatory reform does not operate in a practices from one another. Eight of the region’s economies Asia 6 of 8 economies reformed. In East Asia and the Pa- 61 eased business start-up. By contrast, only 8 economies
vacuum. New evidence suggests that an economy’s govern- have reduced or eliminated their minimum capital require- ciﬁc 17 of 24 did. amended collateral or secured transactions laws—and only
ance structure and natural resources inﬂuence the motiva- ment since 2005. Five of these 8 used to have among the Among OECD high-income economies 17 reformed, 11 amended labor regulations, 7 making them more flex-
tion for reform. But even in difﬁcult circumstances, creating highest requirements in the world — up to $120,000 in focusing mostly on easing the corporate tax burden and ible, 4 opting for more rigidity. Outside pressures are often
a regulatory environment with efﬁcient administrative proc- Saudi Arabia until 2007. Egypt, Jordan, Morocco, Saudi Ara- improving property registration systems. Germany created required to push through substantial legislative changes. In
esses and strong protection of property rights can set the bia, Tunisia, the United Arab Emirates and the Republic of a new form of limited liability company, doing away with this sense the current crisis may represent an opportunity.
stage for firms and investors to take opportunities as the Yemen all operate one-stop shops for starting a business. start-up requirements that were more than 100 years old. Historically, many reforms have been prompted by re-
economy develops. New research suggests that given the In 2008/09 reforms also intensiﬁed in other areas, sim- Germany is no stranger to regulatory competition. cession or ﬁnancial crisis. The East Asian crisis motivated
right conditions, particularly in low-income economies, sim- plifying processes for getting construction permits, for trad- In recent years, taking advantage of the common EU many economies to reengineer their bankruptcy systems.
ple measures can make a difference. Analysis of 6 years of ing across borders and for enforcing contracts through the market, German limited liability companies increasingly Some, such as Singapore and Thailand, reformed laws to
Doing Business reforms ﬁnds that in relatively poor but well- courts. registered in the United Kingdom, where registration was strengthen investor protections.
governed economies, a 10-day reduction in startup time Reforms in Latin America and the Caribbean also in- easier and less costly, rather than in Germany. The new law Postcrisis bankruptcy reforms were also carried out in
was associated with an increase of 0.4 percentage points tensified, with 19 of 32 economies reforming. Colombia, may reverse this trend. Turkey in 2003/04 and in Colombia in 1999. In the United
In Focus Ease of Doing Business
States the Great Depression prompted the country’s first it easier to start a business, deal with construction permits
comprehensive bankruptcy reform in 50 years. This past and transfer property.
year 18 economies reformed their bankruptcy regimes, as But while successful reformers follow a clear direction
measured by Doing Business. This number may increase in in their policy agenda, they do not hesitate to respond to
the future as economies face the need to deal with system- new economic realities. Mauritius, the top-ranked economy
ic distress. In times of recession, keeping viable companies in Sub-Saharan Africa, just announced a new insolvency act
operating as a going concern and preserving jobs becomes “to maintain the viability of the commercial system in the
especially important. And the more quickly the assets of country.”
nonviable ﬁrms can be freed up, the easier it is to remobi- Successful Doing Business reformers are comprehen-
lize those assets. sive. Over the past 5 years Colombia, Egypt, Georgia, FYR
France and Germany were among the first to reform Macedonia, Mauritius and Rwanda each implemented at
bankruptcy systems in response to the current crisis. In least 19 reforms, covering 8 or more of the 10 areas meas-
Eastern Europe and Central Asia several economies have ured by Doing Business. This broad approach increases the
recently started to do so. Latvia’s new insolvency law be- chances of success and impact. Recent research suggests
came effective in January 2008, Lithuania’s in July 2008. that reforms in different areas tend to be complementary.
And in December 2008 Estonia adopted a new reorgan- One study ﬁnds that after reforms reducing barriers to entry
ization act that establishes a legal procedure enabling dis- in India, states with more ﬂexible employment regulations
tressed companies on the verge of insolvency to reorganize saw a 25% larger decrease in informal ﬁrms. Other studies
themselves, restructure their debt and take other measures show that when economies open up their product markets
to restore their ﬁnancial health and proﬁtability. to international competition, the beneﬁts are greater if the
Such efforts are timely. The region’s average recovery cost of entry is lower. Lower barriers to entry allow ﬁrms to
rate following bankruptcy is 32%, far lower than the 69% in move more easily toward industries that most beneﬁt from
OECD high-income economies. trade openness.
Consistent reformers are inclusive. They involve all rele-
vant public agencies and private sector representatives and
What Consistent Reformers Do institutionalize reform at the highest level. Colombia and
Rwanda have formed regulatory reform committees report-
As Doing Business has tracked regulatory reforms over ing directly to the president or prime minister.
the past 6 years, some patterns have started to emerge. More than 20 other economies, including Burkina Faso,
Regulatory reform tends to pick up when pressure rises. India, Liberia, FYR Macedonia, the Syrian Arab Republic and
One reason can be increasing competition as economies Vietnam, have formed committees at the ministerial level.
join a common market or trade agreement, such as the Reforms in Egypt involved 32 government agencies sup-
European Union or the U.S.–Central American Free Trade ported by the parliament.
Agreement. Financial crisis and economic downturn are an- Successful reformers stay focused thanks to a long-
other strong motivation for reform. term vision supported by specific goals. Malaysia aims to
So is the need to rebuild an economy following con- be a fully developed economy by 2020. Colombian Presi-
ﬂict, as in Liberia, Rwanda and Sierra Leone. Whatever the dent Alvaro Uribe envisions a new Colombia in which, rather
motivation, governments that succeed in sustaining reform than 60% of the population living in poverty, most would be
programs, as measured by Doing Business, tend to have counted as middle class. Rwanda aims to become a tech-
common features. To begin with, they follow a longer-term nology and trade hub in the region. The Kyrgyz Republic
agenda aimed at increasing the competitiveness of their wants to become the center for regional regulatory excel-
ﬁrms and economy. lence in Central Asia, Azerbaijan the gateway to the region.
Colombia, Egypt, Malaysia and Rwanda are all examples Setting long-term goals and keeping a steady course
of economies incorporating business regulation reforms of reform might help economies recover from shocks, in-
into a broader competitiveness agenda. Such reformers cluding the current global financial and economic crisis.
continually push forward and stay proactive. Singapore and In the words of Egyptian Minister of Investment Mahmoud
Hong Kong (China) rank among the top economies on the Mohieldin, It is not just a crisis of the economy. It is a crisis
ease of doing business and are also some of the most con- of economic thinking. It is a crisis that is confusing many re-
sistent reformers. This year Singapore once again tops the formers . . . [but] whatever crisis you are facing, you need to
rankings on the ease of doing business—for the fourth year make life easier for those who are endeavoring and working
in a row. And in the past year it continued with reforms, im- hard to create opportunities for jobs, and this is the least
plementing online and computer-based services to make that we can be doing.”
Feature Balanceable Creatures
Lee Yang-won is
an artist who made
to the development of
art with his portraits,
landscapes and wildlife
Feature Balanceable Creatures
In the middle of Korean War, when he Even though I missed it three times in one of the most important things of his
just a little boy, Artist Lee Yang-won’s row, I could still participate in the com- work- ‘the balance between ﬁgure and
family fled Hwanghaedo in North Ko- petitive exhibition when I was in the nature’.
rea, to settle down in the South. His army. I depicted the military lifestyle in Naturalism and skilled painting
father was an amateur poet and let his my paintings when I was working as an of Artist Lee have brought him many
eldest son to do whatever interests ofﬁcer at the boarder line,” he said. words of praises. An art critic Kim
him. Although it was a strain on his As he noted, for a while, he was Byung-jong (Seoul National Univ.) said
bank account, Atrist Lee’s father let on his own, relaying figure painting in that Artist Lee’s recent works have
him chase his dreams. Korea. At present, he has come back more vitality and also can see through
In those days, the best thing that a to Korean art society after quite a his mind of positive and gladness.
boy could do was painting. With his fa- long vacuum with a brand new style of “Artist Lee’s old style was absolutely
ther’s trust and support, a little painter methods. According to him, as he gets skilled and shows the general painting
could grow up as a young artist. older and older, he could get his eyes of the beauty of line shapes. But now,
While still a teenager, he could of childhood back. Something he used in his age of 70s, his style has changed
enter the Seoul National High School to overlook, such as a root of plant, more likely to architectonic with colors
of Art, where he learned not only the ﬂower, and small animals. and balance,” he said.
skills of painting, but also had an op- Artist Lee retired from teach- In the old days, he used only
portunity to pursue his passion. ing several years ago and moved to Soo-muk (Korean ink) and Hanji (Ko-
Later, as Artist Lee notes, his his studio, also his cottage, where he rean paper). As time and generation
college life in the Seoul National Uni- could have his own artistic environ- changed, he started to paint on canvas
versity was the golden age for him. ment with beautiful nature. “Living in with a variety of dyestuffs. For the ex-
He won a lot of art competitions and the countryside, especially with beauti- pression of calmness, he still uses Ko- be ﬂexible to change if he ﬁnds better As long as he can hold his brush,
won many prizes. Though he narrowly ful landscape and river flow help me rean materials, but to depict shiny and way to improve his expression. he will keep painting what he feels and
missed the special prize three times very much to enjoy my work. Also, designated expression he uses other As Artist Lee’s concurs with crit- thanking nature, he said. He is quite
in row because of his military service, when my eyes get tired, I can walk 30 materials as well. ics’ agreements, he is working on his healthy for his age of 70s, and still has
he could still hold his ground for a long meters down to the river for fishing,” “Change and fusion cannot be fusion art of balanced expression be- clear sight to see beautiful natures
time in the national competition. he said. a bad thing at all. Just like how tradi- tween naturalism and traditionalism. around him.
“I could honorably tell to myself In his own style of figure paint- tional music has evolved, art has also He said that he is old enough to thank “My second golden age has just
that the first golden period of my life ing, Artist Lee is trying to graft natures found its evolutionary ways by many nature, and experienced and skilled begun. I hope to leave behind paintings
was at my university. I won the spe- together. Just like what he has drawn promising artists these days,” he said. enough to express his artistic thoughts which can be remembered as pieces
cial prize in national art competition recently, colors and touches show He added that he is also an artist who as well, just like what critics and galler- of happiness to viewers.”
4 times, although I was just a rookie. peaceful happiness itself. In fact, it is is not afraid of challenge and he will written by Yoo Han-seok ies said.
Policy Check Stimulating Green Growth Related Industries
Current ﬁnancing by the ﬁnancial market and the gov-
ernment’s support are not ﬁt for green growth related indus-
tries for the following reasons: 1) the industries have a lot
Stimulating Green Growth The Korean government
plans to stimulate
of uncertainties; 2) their return on investment takes longer
to recuperate; 3) their external benefit is larger than that
of other industries; and 4) although private ﬁnancers offer
green industry related loans at favorable rates and deal with
investment in green green industry related products, the level of support is low,
mainly giving loans to projects of full-ﬂedged technologies
growth related while leaving industries in their initial stages of R&D and
industries. The plans are Directions of the plan
To attract private investment, the government decided
aimed at establishing to remove uncertainties: The government will introduce a
certification system to approve green technologies and
the ﬁnancing mechanism projects, and will verify companies doing green growth re-
lated projects as “green enterprises” if they 40 August 2009
for green growth related Plans to Finance Green Growth Related
industries and expanding Industries
investment base to Policy Issues qualify for the government’s requirements.
To practice the approval system transparently and profes-
sionally, a joint public-private consultation body is planned
prevent a potential to be launched with experts home and abroad. Schemes to
nurture green industries will be set up in the third quarter of
bubble in the industries. 2009, which will include establishing standards for selecting
key areas of green industries based on future exports, com-
mercialization possibilities, and effects on other industries.
Private funds will be invited to participate in green SOC
projects such as building bicycle paths and developing new
& renewable energy, and will be given incentives including
value added tax cuts and eminent domain. Energy Service
Companies (ESCOs)* will be allowed to expand to CO2
reduction and new & renewable energy related businesses
from just energy saving ones, with increased government
investment from 135 billion won in 2009 to 200 billion won
* A company providing energy saving facilities for other
companies short of ﬁnancing and technology, and recol-
lecting investment from saved energy cost.
Policy Check Stimulating Green Growth Related Industries
government will make efforts to establish a foundation to Detailed plans to support eco-friendly cars and LED
facilitate inducing funding from the private sector. Carbon lighting, the former to be commercialized and the latter
funds of 100 billion won will be set up in October 2009 to full-fledged, were made to provide customized financing.
invest in carbon emission rights market in developing coun- Project financing worth 600 billion won will be provided
tries, followed by carbon emission rights exchange in Korea, to eco-friendly cars to support facilities investment, while
which will be test run in 2011. To support exports of eco- parts-supplying associates will access one trillion won of
friendly technologies and projects, the government’s export bridge loans designed to ﬁnance their facilities investment
ﬁnancing will be expanded from 1.0 trillion won in 2009 to and business operation until 2012. In addition, financial
3.0 trillion in 2013 with increased government guarantee for institutions and large corporations will jointly purchase the
exporters. On top of that, a new Social Responsibility Index associates’ Asset Backed Securities.
reﬂecting the level of a company’s environment-friendliness As LED lighting costs much to be replaced for con-
will be developed in order to measure corporate investment ventional lighting, the government planned to create initial
in green growth related areas. The stock price index only demand by changing conventional lighting in public entities
for green growth related industries is also planned to be in- with LED lighting. To ﬁnancially support public entities sub-
troduced. ject to replacing with LED lighting, the government fund of
100 billion won will be made available to LED leasing com-
Main contents of the plan
The plans are formulated on the basis of three stages entail the investment.
of development of green growth related industries. “Green funds” of 500 billion won are planned to be
formed by the KDB and National Pension Service (NPS) in
Stage 1: R&D and commercialization the second half of 2009. Investment in green industries will
The government will expand ﬁscal support from 2.0 tril- be one of the Economic Bulletin 41 criteria in assessing the
lion won in 2009 to 2.8 trillion in 2013, along with the funds performance of National Pension Fund, and Private Equity
of 300 billion won collected by the Korea Development Funds will be allowed to directly invest in SOC projects.
Bank (KDB). SMEs in green growth related industries will Long-terms deposit products and bonds investing in
be supported with funds exclusive for them, which will be green industries will be introduced to individual investors,
expanded from 60 billion won in 2009 to 1.1 trillion won in who will be able to invest up to 20 million won in green in-
2013. Credit guarantees offered to “green enterprises” and dustry related deposit products, or up to 30 million won in
“green projects” will be increased almost three folds from 2.8 green industry related bonds. Both ﬁnancial products, hav-
trillion won in 2009 to 7 trillion won in 2013. ing three to five years of maturity, will be exempted from
capital gain taxes. Deposits and bonds with one year matu-
Stage 2: The maturing industry rity will be given the interest rate of time deposits.
To support industries in their maturing stage, long-term
funding needs to be available in the capital market, along Stage 3: The fully-ﬂedged industry
with tax incentives, if necessary, to offset the risks that may Full-fledged industries attract investors, therefore the
FTA Watch Update on Korea’s Free Trade Negotiations
In a recent report, Lee Jong-kyu of Samsung Economic duction, non-tariff barriers will remain intact such as compli-
Update on Korea’s Research Institute (SERI) notes that the economic effects
of the Korea-EU FTA will likely be larger than those of the
Korea-US FTA since the former would boost both imports
and exports. In particular, given that the Korea-EU FTA will
ance to local content ratio, strict environmental regulations,
and technological barriers. And there is a likelihood that
complicated customs clearance process and discriminatory
regulations to foreign companies remain even after the FTA
Free Trade Negotiations contribute to creating a more advantageous export environ-
ment, Korea would be able to sustain its trade surplus with
the EU. Korea’s flagship export items, especially automo-
biles, would be expected to beneﬁt the most, while, on the
takes effect. Therefore, companies need to monitor con-
tinuously, assess carefully and prepare for the new trade
“Korean companies should actively utilize the FTA to
EU side, the industries of reﬁned chemicals, parts and ma- enhance their price competitiveness in the EU market.
terials and large vehicles will become the largest beneﬁciar- Korean goods can enjoy a more favorable environment in
ies. the EU market thanks to the FTA, as the EU is not likely to
In the agricultural sector, Korea will likely witness an seek FTAs with China, the US and Japan for the time being.
increase in imports of pork and wine. In addition, the EU Securing more market share in the Western Europe market
ﬁrms will likely make bigger forays particularly in the areas will help enhance brand and product image.”
of ﬁnance, environment and telecommunication. One of the Domestic demand-oriented companies should make
possible side effects of the expected increase in shipments good use of EU’s global companies which have a weak busi-
from the EU is options to substitute higher-priced imports ness base in Korea. They need to seek ways to cooperate
from elsewhere, the report said. with them including via strategic alliances, M&As and R&D
“Overall, the Korea-EU FTA should realize a host of pos- partnerships and shared channels. The market opening can
itive beneﬁts, including expansion of exports, improvement be a stepping stone for Korean companies to turn chal-
in the economic structure and more foreign investment.” lenges into opportunities, the report concludes.
As regards the implications of the deal, the SERI re-
port observes that though the Korea-EU FTA will increase
imports of competitive EU goods, it will contribute to ad-
vancing Korea’s economic structure to the next level as the
EU’s globally competitive industries such as machinery and
chemicals can complement Korea’s weaknesses. Further-
more, the trade agreement can improve the chronic trade
imbalance between Korea and Japan as EU’s machinery,
chemicals and components will replace Japan’s in the Ko-
“Thanks to the FTA with the EU, Korea will be able to re-
duce high dependency on the US by strengthening political
and economic cooperation with the EU, a balancing force in
the international community, particularly in Northeast Asia.
An increase in foreign direct investment and job growth are
The Korean government, however, should set up sup-
port plans about sensitive items which are likely to be af-
fected by the FTA. Particularly, service, stock breeding and
agricultural industries are likely to be hit hard and careful
research and support plans about these industries are nec-
essary. For industries which will likely undergo restructuring
and be damaged by the FTA, multilateral analysis should
be conducted as to possible damages, estimated price-up
effect of the service sector and impact of scaling down of
public service on each social class.
Not only lowering or removing tariffs but also alleviating
non-tariff barriers should also be analyzed. Despite tariff re-
FTA Watch Update on Korea’s Free Trade Negotiations
Colombia is next target for Korean trade talks. Both the
countries agreed to begin talks on a free trade agreement
within the year, the government said after a meeting be-
tween the two countries’ foreign ministers here. The sides
wrapped up a ﬁve-month joint study on the feasibility of an
FTA in late August.
“The ministers agreed to make efforts to get the two
countries to start ofﬁcial FTA talks within the year on the ba-
sis of the results of the study,” Foreign Ministry spokesman
Moon Tae-young said. Colombian Foreign Minister Jaime
Bermudez arrived in Korea last month, for a three-day stay,
during which he also met Knowledge Economy Minister Lee
Yoon-ho, who is in charge of Korea’s commerce and trade
The Latin American nation has emerged as an attractive
investment destination for Korean companies that last year
alone won contracts to develop nine oil ﬁelds there. Korea
National Oil also acquired a 50-percent stake in Peru Petro-
Tech in February.
“The outcome is fairly positive and we are thinking
about beginning the talks,” Bermudez told The Korea Herald
newspaper in an interview.
“We are very much interested in developing further re-
lations with Korea. We want more Korean ﬁrms to invest in
Colombia, to export to Colombia and import from Colombia.
Besides energy, there are some Korean companies work-
Peru-Korea FTA ing in Colombia’s automotive and electronics industries but
more can be accomplished speciﬁcally in infrastructure de-
Peruvian Foreign Minister Jose Garcia Belaunde said velopment like roads, ports and airports,” he was quoted as
his government hopes to conclude free trade agreement saying.
(FTA) talks with Korea before November. Meeting with Ko- So there are great opportunities for Korean companies
rean President Lee Myung-bak during his three-day trip, to operate in Colombia and that’s a big market with a lot to
Belaunde said Peru wants to wrap up the talks before Presi- be done, he told the newspaper.
dent Alan Garcia visits Seoul. The deal, if signed, will be Ko-
Australia-Korea FTA rea’s second trade agreement with a South American nation
following its FTA with Chile signed in 2003 and enacted the
Korea and Australia launched their second round of Although Australia has been pushing for a trade pact following year.
talks on a free trade agreement in Seoul last month, and with Korea for several years, Korea had been delaying the The foreign minister’s visit follows up on an agreement
discussed issues including tariff concessions and bilateral talks since its imports from Australia were worth more than between the Korean and Peruvian presidents, who met last
investment. This round follows talks that took place this May three times Korean exports to the country, and a ﬁnalized year and agreed to upgrade their countries’ relations to a
in Canberra, Australia. Both the nations exchanged tariff free trade agreement would likely increase imports of such “comprehensive partnership.”
concession lists. products as coal and meat even further. “I was very pleased to see Peru’s efforts to maintain a
Korea mainly exports automobiles, mobile phones, Meanwhile, experts in Korea said that a Korea-Australia close relationship between the two countries during my trip
color TVs and car parts to Australia, while importing crude FTA should be ratiﬁed as quickly as possible, as neighboring to Peru last year,” the Korean president told Belaunde.
oil, soft coal, iron ore, aluminum alloy and meat from the is- countries including China and Japan started negotiations According to the Korean Chamber of Commerce and
land continent. earlier. China opened trade talks with Australia in 2005, Industry, trade between Korea and Peru has increased from
Last year, bilateral trade between Korea and Australia, while negotiations with Japan began in 2007. $400 million in 2004 to $1.6 billion last year. Korea’s direct
the country’s eighth-largest trading partner, reached $23.2 investment in Peru totaled $1.18 billion in 2008. Korean
billion. Korea exported around $5.2 billion to Australia while ﬁrms are seeking to take part in Peru’s ethylene plant con-
importing about $18 billion. struction project and exploration of uranium.
FTA Watch Update on Korea’s Free Trade Negotiations
The Korean government has submitted a bill on a com- The trade accord, if ratiﬁed in both countries as sched-
prehensive trade agreement with India to parliament for ap- uled, will likely take effect as of January 1st, 2010. The CEPA
proval, which could increase bilateral trade considerably. is expected to boost bilateral trade by as much as $3.3 bil-
Korea and India concluded the deal, called a Compre- lion annually, according to estimates by the state-run Korea
hensive Economic Partnership Agreement (CEPA), on Aug. Institute for International Economic Policy.
7 to cut duties on such goods as auto parts and electronics The agreement is essentially similar to the free trade
and to boost cooperation between the two Asian economic agreements Korea has signed with the US, EU and other
powerhouses. trading partners, but phases out tariffs more slowly.
The National Assembly will deliberate on the trade deal
during the ongoing parliamentary session, the trade ministry
said. India’s parliament has yet to ratify the agreement.
Expand Your Horizon Special Report / 90
Committee Wrapup / 96
Company News / 98
Network Club / 100
EUCCK News Special Report
The EUCCK organized a special tour of
Yeon-Pung-Mun, the eco-friendly reception
center of Cheong Wa Dae (Blue House)
on July 14th.
EUCCK members at Yeon-Pung-Mun, getting a brieﬁng from ofﬁcials
T h e Ko re a n g ove r n m e n t h a s a n - and create jobs for 1.56 to 1.81 million Participants were informed that installed on the roof and center of the
nounced three action plans and 10 pol- people. The government has decided this new building has been built by us- frontside window in order to generate
icies could help it become one of the to extend investment to private sec- ing sustainable materials, solar panels electric power. The PV system is com-
top seven green powers in the world by tors related to green technology and and geothermal technology. For a cost prised of solar cell module, storage
2020, and among the top ﬁve by 2050. activate green financing through issu- of nearly 3 billion won this designed battery and power switching device. It
The three action plans are (1) ing long term, low interest green bonds two-ﬂoors-house is viewed as a model is an environment friendly system that
measures for climate change and se- and savings. of “green office” and low-rise building generates electricity using series/paral-
curing energy independence, (2) crea- Following this “green growth according to current administration’s lel circuits.
tion of a new growth engine and (3) im- strategy”, Cheong-Wa-Dae (The Blue Green Growth Policy. The building is also equipped with
proving quality of life and strengthening House) has set an example by con- The symbolic design of the facil- an energy-conserving heat source
the status of the country. structing a brand new reception and ity signifies the traditional value of its method using geothermal energy,
To promote green growth, the gov- information center Yeong-Pung-Mun location and its public aspect. The use which supplies stable heat source and
ernment will inject a total of 107 tril- using environment friendly and sustain- of a transparent design highlights the saves energy cost. It is a technology
lion won until 2013, which is 2 percent able alternative energy systems. importance of clean government and which uses the temperature difference
of GDP and also twice the amount The EUCCK organized a special offers a convenient space. Throughout of water, underground water and un-
recommended by the UN for green tour of this facility for members, so the building, clean colors and shapes derground heat for cooling and heating.
investment. The goal is to upgrade pro- they could understand the concept of have been used to express modernity.
duction worth 182 to 206 trillion won “green buildings.” Mr. Grauhar, Secretary General, EUCCK Photovoltaic panels have been
EUCCK News Special Report
The EUCCK organized a special monthly
luncheon meeting with Mr. Yoon Jeung-
hyun, Minister of Strategy and Finance on
Korea is recovering fast from the global Given these positive develop-
economic crisis, which followed the ments, the EUCCK organized a lunch-
bankruptcy of the U.S. ﬁnancial house eon meeting with Minister of Strategy
Lehman Brothers last year. In the lat- & Finance, Mr. Yoon Jeung-hyun who
est positive news about the economy, spoke on “The Korean Government’s
Korean manufacturers’ business conﬁ- Policy Direction for Another Economic
dence for September climbed to a near Takeoff.”
two-year high on growing optimism He noted that faced with an un-
about an economic recovery. Accord- precedented economic crisis, countries
ing to Bank of Korea’s business survey across the world share something in
index (BSI) of manufacturers’ expecta- common: the necessity of active roles
tions, the September reading was the by governments. Thus ﬁscal expansion
highest level since November 2007. and measures to boost domestic de-
A recent set of indexes measur- mand have been taking place all over
ing sentiment have been on an upward the world.
trend, reﬂecting optimism that the Ko- “Korea is not an exception. The
rean economy might have passed its Korean government has taken preemp-
worst downturn in more than a decade. tive and decisive measures, the prior-
Korea’s consumer confidence for Au- ity being economic recovery. We have
gust also climbed to the highest level in introduced the largest supplementary
more than seven years. Moreover, the budget in Korea’s history and front-
economy recorded the highest level of loaded fiscal spending to prevent a
GDP growth out of all OECD members sharp economic contraction. We also
EUCCK members listening to MOSF Minister Yoon
in the second quarter. have taken actions to stabilize ﬁnancial
EUCCK News Special Report
and foreign exchange markets through tain active ﬁscal and ﬁnancial policies, provide active support so that corpo- unreasonable burdens on companies. carbon, green growth” as a national vi-
interest rate cuts and liquidity injec- including uninterrupted execution of rate investment can be made despite Along with these measures, the Korean sion, using it as a growth engine to pro-
tion,” he said. supplementary budget, until economy difﬁcult economic conditions. government will continue its efforts to mote sustainable growth and to create
Moreover, the government has is firmly established on a path to re- “To that end, we will create a create a better environment for foreign new markets and jobs.
pursued job creation and stabilization covery. It will improve capital ﬂow in a business-friendly environment more investment,” Minsiter Yoon said. Lastly, Korea will make efforts to
of the public’s livelihood by introduc- way that ample liquidity in the ﬁnancial than anything else. So far, the Korean It is encouraging to see foreign in- advance its service industries. Until
ing job sharing and youth internship market can be channeled into the real government has pursued abolishment vestment in Korea increase 32% in the now, the Korean economy has largely
programs. In addition to setting up cur- economy, while utilizing the restructur- of restrictions on total amount of share first seven months of 2009 compared relied on the manufacturing sector. As
rency swap agreements with the US, ing fund to support the resolution of holding of other companies, less strict to last year based on renewed confi- a result, Korea ranks 29th out of 30
Japan and China; thus easing concerns non-performing loans. separation of banking and commerce, dence in the Korean economy’s growth OECD member countries in terms of
on the Korean economy, Korea has “We will also carry out close moni- and deregulation on holding compa- potential and outlooks for recovery. the ratio of service industries to the
taken a leading role in international toring and policy implementation to nies.” “However, I understand very well GDP. The productivity in the service
policy coordination, such as, in G-20 keep the real estate market stable. Re- In addition to those policies, the that much still remains to be done for sector is half that of its manufacturing
and ASEAN+3. cently some have raised the necessity government will increase tax credit on Korea to be a more attractive invest- sector. Thus, the Korean government
Minister Yoon said that due to the of normalizing macroeconomic policy R&D investment in source technologies ment destination. In this regard, the will create an environment where the
government’s active efforts and eas- or the exit strategy. Regarding this, we and new growth engine industries to Korean government will increase incen- service industries can be fostered, cre-
ing of international financial strains, intend to take a step-by-step approach the highest level in the world. It will also tives to attract foreign investment, en- ating quality jobs and improving eco-
the Korean financial market seems to depending on the progress of econom- induce facility investment in the pri- hance the ﬂexibility in the labor market nomic fundamentals.
be stabilizing. The Korean economy ic recovery.” vate sector through capital investment and remove inconveniences that for- “We will ease regulations on the
is showing early signs of recovery, so While managing macroeconomic and purchase of long term corporate eign investors may face in doing busi- entry and operation of key service in-
called “green shoots.” stability, the Korean government will bonds, using capital that will be raised ness and living in Korea. dustries such as education and medical
Unless unexpected external shocks implement structural reforms to im- by this year by institutional investors Korea will make utmost efforts treatment, while formulating measures
take place, Korea is likely to achieve prove the competitiveness of our econ- like the government, Korea Develop- to maintain its track record by laying to support R&D activities in service in-
its trend of positive quarterly growth, omy. It will push through a restructur- ment Bank, Industrial Bank of Korea the foundation for sustainable growth. dustries.”
reaching the initial target of an annual- ing plan for companies with unsound and national pension service. The government will pursue an active Regardless of the nationality of
ized growth rate of negative 1.5%. ﬁnancial structure in such industries as “We will streamline procedures open economy policy to upgrade the major investors, both domestic and
Despite these encouraging eco- construction, shipbuilding and shipping. necessary for starting businesses, competitiveness and productivity of foreign companies doing business in
nomic indicators, however, a high level It will also support the ﬁnancial sector, while improving systems that shoulder the economy as a whole. As the next Korea are same in that they contribute
of uncertainty and potential risks still resolving non-performing loans by uti- chair of the G-20 meeting, Korea is to the Korean economy. For this rea-
remains. Given Korea’s high depend- lizing the 40 trillion won in restructuring now leading coordinated international son, the government and the people of
ence on trade, we cannot afford to be funds. efforts against protectionism. Korea see foreign companies as invalu-
complacent. “Meanwhile, we will implement “In addition, we will continue to able economic partners, he said.
Indeed, some of the sources of plans to streamline and advance pub- expand our trade and investment
concern in the international financial lic institutions including privatization, partners by ratifying FTAs with large
market include a risk of double-dip merger and acquisition, and increasing economies like the US and India in an
recession and volatility of oil and other management efﬁciency. We will expe- expeditious manner and signing FTAs
commodity prices. dite preparations for sales of 24 public with countries such as Australia, New
There is also the fact that recent institutions subject to privatization, Zealand, Peru and the GCC,” he said.
signs of economic recovery in Korea including Korea Real Estate Investment In the near future, Korea will
do not seem to stem from the private & Trust (KOREIT) and Korea Asset in emerge as an FTA hub by concluding
sector. Trust (KAIT),” he said. FTAs with most major economies in the
Keeping that in mind, the Korean Corporate investment is one of world, providing a wide array of differ-
government will maintain its vigilance the most effective ways to create jobs ent business opportunities to foreign
in formulating and implementing eco- and sustain economic growth. In the companies doing business in Korea as
nomic policies for continued economic wake of the global financial crisis last well as domestic companies.
stability. year, governments around the world He also observed that the Korean
“There is a saying that a crisis is an have offset the reduction in private government is promoting “low carbon,
opportunity in disguise. I believe that consumption and investment to a large green growth” as a way to sustain eco-
the current crisis provides the Korean extent. However, there is a limit to roles nomic growth. In the future, economic For further details contact:
economy with a new opportunity for of governments in revitalizing econo- competitiveness will be determined de- Yang Su-kyung, Manager,
another takeoff,” he said. mies. Minister Yoon receiving a plaque of appreciation pending on out-greening. Last year, the PR & Media EUCCK
from EUCCK President Mr. Hurtiger
The Korean government will main- Thus, the Korean government will Korean government proclaimed “low Tel. 725-9887
HR Training Course
EUCCK HR Committee is launching an industry Training
Course for people who are in charge of the HR tasks
within their workplace.
The course is designed to provide indi-
viduals a broad knowledge of contem-
porary HR issues, hone their existing
knowledge and help clarify common
day to day HR challenges.
The topics covered within the course: Duration of the course:
15 weeks in total; 3 hour lecture once a
week (every Tuesday from 6pm to 9pm)
and Industrial Relations
HRM EUCCK Conference room; 21st Fl. Ho-
tel KUKDO, #310 Euljiro 4-ga, Jung-gu,
The participants will learn about inter- The course will be in English only.
national best practices and how to ap-
ply these in the Korean workplace. More information about the course, lec-
The theory learned will be exercised turers, cost and application process is
through case studies and other prac- available at EUCCK – eulucie@eucck.
tical exercises implemented into the org
course curriculum. Participants will
be able to discuss real issues from As this is the first year of the course,
their working environment with indus- the number of participants is limited to
try leaders who were involved in the 15 people.
Advisory Board Members: Steering Committee:
Mr. Paul Cho – Kim & Chang
Dr. Anne Cooper – ING Life Prof. Woosik Moon - SNU
Mr. Philippe Tirault – Korn Ferry International Ms. Shelly Korn - MindsGroup
Ms. Hyuna CHoi – Watson Wyatt Ms. Lucie Lompejova – EUCCK
Mr. Peter Hatt – SC First Bank
HSBC Living Finance 9 7 - 6 CH E O N G DA M 2 - D O N G G A N G N A M - G U S E O U L KO R E A T E L 0 2 5 4 0 3 0 9 4
Interior Design Service available www.armanicasa.com
On 12th September 2009, HSBC Ko- “I am very happy to have a chance
rea held HSBC Living Finance, a ﬁnan- to meet and teach the Korean stu-
cial literacy program for middle school dents. I hope that HSBC Living Finance
students. The interactive workshop of will help them plan and build a better
HSBC Living Finance provided students future,” said John Goddard, EVP and
with an opportunity to easily learn im- Head of Personal Financial Services
portant ﬁnancial concept such as iden- HSBC Korea.
tifying personal goals, differentiating HSBC Korea launched HSBC Living
‘needs’ from ‘wants’, managing ﬁnancial Finance in 2008 to help middle school
risk, and saving and investing money. A students develop the knowledge and
senior executive and Financial Planners skills required to make wise ﬁnancial de-
of HSBC Korea volunteered as a one cisions.The second HSBC Living Finance
day teacher and shared their experi- workshop in 2009 is scheduled for 24
ence in wealth management. October 2009. Participants will be re-
ceived on a ﬁrst come ﬁrst served basis.
EUCCK Event Network Club
EUCCK August Network Club
Thanks to all sponsors
at the Network Club
For further enquiries contact :
Ms. Choi Eun-Jin, 02-725-9994
or E-mail at email@example.com
More photographs can be downloaded
on the EUCCK website: www.eucck.org
EUCCK Event Network Club
EUCCK September Network Club
Thanks to all sponsors
at the Network Club
For further enquiries contact :
Ms. Choi Eun-Jin, 02-725-9994
or E-mail at firstname.lastname@example.org
More photographs can be downloaded
on the EUCCK website: www.eucck.org
Overview of Business &
EUCCK Event Network Club BUSAN & GYEONGSANG
The EUCCK Busan ofﬁce held its monthly social new managers of member companies. Mr. Michael
Summer Night BBQ Network Club gathering ‘Network Club’ on the 20th of August,
2009 at Seacloud Hotel outdoor VIP lounge. The
chamber offers incomparable opportunity to
network with the top executives from European
Kim, new general manager of Paradise Hotel
and Mr. Rowan Bullock, new general manager of
Dpworld, were gladly welcomed and greeted. The
next EUCCK Busan network club will be held at
and Korean companies through this casual the roof top of Korea Art Center in Haeundae, with
meeting. In his opening remarks, Mr. Alan Thomson, a great view of Gwangan bridge celebrating the
Chairman, EUCCK Busan Ofﬁce introduced the Pusan International Film Festival (PIFF)
Thanks to all sponsors at
the Network Club
For further information contact :
Judy Yoon, Manager,
EUCCK Busan Ofﬁce
Tel : 051 744 6712 or
E-mail : email@example.com
EUCCK Busan News Clip BUSAN & GYEONGSANG
2009 Pusan Korea is becoming
International No. 1 shipbuilding
Film Festival country!
Korea Marine (KORMARINE) will be of BEXCO and outdoor tent exhibition
held at BEXCO in Busan from Octo- places with 1,350 booths, 10% increase
ber 21 to 24. This is the only global top compared with last year.
nominated exhibition in Korea repre- 15 countries such as Germany,
senting Asia area. Even though Korea England, Netherlands, Norway, Den-
experienced the most difficult indus- mark, China, Korea, Austria, Finland,
trial situation, KORMARINE continues USA, Singapore and Italy will join
Entering its 14th year, Pusan Interna- “Good Morning President”, starring project market Pusan Promotion Plan to cruise well. KORMARINE as national booths. In
tional Film Festival (PIFF) welcomes all heartthrob Jang Dong-gun, and close (PPP). Guests include Josh Hartnett This exhibition has been held every particular, Germany dispatched 140
the people interested in movies. The with Chinese thriller “The Message,” and Lee Byung hun featuring in Tran 2 years for more than 30 years gain- companies and USA expanded the
14th PIFF is scheduled to be held from co-directed by Chen Kuo-fu and Gao Anh Hung’s “Come With The Rain”, Bry- ing international reputation based on booths as it has too many participated
October 8th to 16th, 2009 in Busan. Qunshu. Also, the festival will screen an Singer as producer of “Trick’s Treat”, the active cooperation of shipbuilding companies. It shows their interest and
The festival was launched in 1996 and a record 355 films from 70 countries, and French director Jean-Jacques Bei- companies, material companies, Busan attention of Korean market and KO-
was the ﬁrst festival to ever take place with 98 world premieres and 46 inter- neix as head of the New Currents jury. city government, shipbuilding material RMARINE. Apart from this, more than
in Korea. It is currently Korea’s larg- national premieres. The Asian Film Market composed companies’ association and related 2,000 people from 40 countries includ-
est ﬁlm festival and is known as one of The festival with motto of “PIFF of PPP and Busan International Film organizations. This year’s KORMARINE ing Poland, Turkey, India, UAE and Hun-
the most dynamic film festivals in the Bracing for the Future” is continuing Commission will be held from October will be held in indoor exhibition halls gary are expected to participate in this
world. on its quest to discover and introduce 11th to 14th at Seacloud Hotel, Para- exhibition as individual booths.
The festival opens its 14th edition Asian cinema as well as support the in- dise Hotel and Haeundae Megabox. At the same time, ISME 2009 will
with local director Jang Jin’s comedy dustry with its Asian Cinema Fund and be held by the Korean society of ma-
rine engineering and the Japan insti-
tute of marine engineering and some
400 scholars related to shipbuilding will
Container trafﬁc of Busan port join. This is the ﬁrst time that this event
will be held in Korea and not Japan.
surpasses 1 million TEU mark for The business meeting held by Busan
city government and Busan Korea in-
two consecutive months ternational trade association will be a
differentiated strategy from other exhi-
bitions for buyers to meet participated
Busan Port is showing signs of recov- trend. BPA reported that container traf- is predicted to be able to recover at companies. Other events such as re-
ery as the world’s shipping companies fic in August totaled 1.64 million TEU a rapid rate in the second half of this ceptions during the period are planned
shake off the recession and get back including 0.553 million TEU of export year. and the organizers are receiving many
to business. According to Busan Port and import and 0.4534 million TEU of According to an official of BPA, inquires from many countries for indus-
Authority (BPA), container traffic that transshipping cargo. In February, Busan Busan port is going to make efforts try observation.
was handled at Busan port in August port’s monthly trafﬁc totaled 0.982 mil- to promote its strong point regarding KORMARINE will distribute 10,000
surpassed 1 million TEU (20-foot con- lion TEU which was the lowest mark. service to main shipping companies copies of Daily news to visitors every-
tainer equivalent), the second succes- Such a result was attributed to and shippers in South America to re- day and inform them of various news
sive record since last November when the relatively increased transshipping tain its reputation as the world’s fifth on the exhibition promptly. They are
the global economic downturn was in cargo. Global shipping companies are biggest port. developing tourist products for visiting
full steam. using Busan port as a port for trans- foreigners to experience Korean cul-
Busan port’s container trafﬁc fore- shipping to handle the gradually in- ture and preparing other services.
cast is predicted to be on the raising creased cargo. Therefore, Busan Port
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GLOBIC NCT is adopting Nano
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RINA is one of the world’s leading classifica-
tion societies and is recording strong, con-
sistent growth. It was established in 1861 in
Genova (Italy) and it is founding member in
1968 of IACS (International Association of
Classification Societies). It provides services
on a global scale but still retains the capability
RINA Korea & Japan country manager, Mr. Giorgio Saletti
market has been rapid, with over than 120 of
vessels delivered in the Far East between 2004
The orderbook in Korea and Japan for
the next three years counts more than 60 ves-
sels of various type including VLCC, Suezmax
oil tanker, ro-ro cargo, chemical tanker and
RINA has established a comprehen-
sive, strategic network of offices and survey
stations to provide a prompt and specific
response to client requests in Asia. Good
performances during surveys drive RINA to
excellent results in PSC scores. RINA performs
testings and certification services in accord-
to offer solutions that take into account the bulk carriers with an aggregate 3 million GT. ance with national and international safety
speciﬁc needs of the client. This growth is the result of RINA’s special ex- standards and with its own Rules for the Clas-
Today, RINA classes a high-quality and pertise in newbuilding services dedicated to sification of Ships. As a notified body, RINA
diverse fleet of over 24.5 M GT, and has shipyards. also certiﬁes marine equipment and pleasure
earned a well-deserved reputation for techni- Although its new building activities in the craft in accordance with relevant European
cal excellence. It is rated by the Paris MOU as region cover all types of ships, RINA has ac- Community Directives (e.g. PPE and MED) In
one of the top three class societies in Europe. quired a leading position in the construction of recent years, the worldwide demand for new
Owners and shipyards from around the world oil and chemical tankers, ro-ro cargo vessels, ships created by increased globalization has
increasingly choose RINA to class their new- bulk carriers and etc. RINA began supervising served the fuel the growth of RINA.
buildings. RINA’s newbuilding orderbook now the construction of the ﬁrst two ro-ro passen- RINA has become a multicultural group,
stands at over forty per cent of its classed ger ferries built in Korea in 2000. The opening providing clients throughout the world with
ﬂeet. of dedicated plan approval centre in Busan in consistent support, advice and service in a
RINA leads the cruise and passenger ship 1999 has strengthened RINA’s reputation as a way they can understand. We look for the best
newbuilding market and the orderbook also reliable and professional partner in the Korea people in each country, those who can absorb
includes ro-ros, oil and chemical tankers, bulk market. our values and deliver them locally, preserving
carriers and cargo ships. We serve owners and We enjoys close co-operation with local the integrity of RINA’s standards while explain-
yards all over the world, with a strong pres- shipyards, and its rapid response capability has ing them in the local context. And we have in-
ence in Italy, Korea, China, Turkey, Singapore produced a signiﬁcant number of newbuilding vested heavily in internal training and support.
and Greece. To ensure that customers receive orders in Asia for new, local customers. The We have strengthened our teams in Korea by
the rapid service for which RINA is widely Plan Approval Centre in Korea is staffed by selecting and training the best engineers and
known, we have widened our global network experienced, dynamic and professional per- naval architects. Our experts speak the same
of offices. There are now 97 RINA offices in sonnel who have had consistent and proven language and share the culture of their clients,
32 countries, all staffed by local experts who success in co-operating with major shipyards. and they always adhere to the same stand-
speak local language. Plan Approval Centers In addition to traditional plan approval and ards.
have been established in Italy, Korea, Turkey, documentation services, RINA Plan Approval
China, Germany and Greece. Training Centers Centre can also provide as below.
have been established to help shipyards and
shipowners ensure that their technical staffs
and crews get the training they need.
A network of centers of excellence is be- Local consultancy at the pre-con- Assessment of the complete life-
ing set up, with the ﬁrst of these in the UK, fo- tractual stages of newbuildings or cycle of a ship from the initial de-
cusing on yachts, coatings and LNG. Outside conversions sign phase
commercial shipping, RINA’s special expertise
in yachts makes it the global leader in mega-
Support to designers on the appli- Re-fitting, and upgrading, includ-
yacht classiﬁcation and certiﬁcation. The serv-
ices are performed efﬁciently and competently cation of newly adopted interna- ing rule framework deﬁnition and
all around Asia, through our multicultural staff tional regulations and speciﬁc ﬂag identiﬁcation of key aspects
of managers, surveyors and engineers, who requirements
serve the needs of our clients, share the same Training on the most speciﬁc and
passion and pursuit the same goals. FEM analysis of any type of vessel innovative technical and regula-
For RINA, Korea has historically been tory topics
the most important shipbuilding markets. The
growth of RINA in the Far East newbuilding
EUCCK Busan Upcoming Event BUSAN & GYEONGSANG
For further details contact:
Upcoming events in EUCCK Busan Judy Yoon, manager of
EUCCK Busan business
meetings will invite EUCCK
committee directors and the
Oct. 7th Oct. 16th Oct. 21th
chairmen of each related
“ Green Busan policy: Incentives for companies” “ Network club: Pusan International Film Festival” “ Legal advice of patent protection”
meetings, together with Paradise Hotel (7:00~10:00) Korea Art Center (19:00~21:00) Paradise hotel (19:00~21:00)
local government ofﬁcers to
Environment and its protection have played an in- EUCCK Busan will hold its network club at the rooftop Legal Counsel of EUCCK IPR Committee will give gen-
provide fruitful information. creasing role in all countries of Europe and particularly of Korea Art Center, which is a famous restaurant, pro- eral advice for Busan members who are exposed to In-
in the European Union. Busan Metropolitan City will in- viding a great view of Gwangan bridge and Haeun- tellectual Property infringement of patent, trademark
troduce the Green Busan policy focusing on the incen- dae beach. Oct. 16th is the closing ceremony for PIFF and copyrights in order to amplify the industry voice
tives for companies and a related case study, which and 17th is the Gwanganli Firework Festival. For Seoul to government, public and media to improve IPR en-
will be followed by presentations by EUCCK Environ- members who are interested, please reserve your forcement and create the environment where IPR is
ment & Energy committee director, Auto Parts and seats in advance. respected.
Please note that this is a tentative list
and the dates and `venue are subject to change. Chemical committee chairmen.
Nov. 6th Nov. 18th Nov. 24th Dec. 4th
“ Logistic & Transportation forum: BPA & Customs “ Taxation and Investment Incentive in Korea” “ The last HR round table in 2009” “ The EUCCK Year-end Party”
ofﬁce” Novotel Hotel (19:00~21:00) Westin Chosun hotel (19:00~21:00) Seacloud hotel (19:00~21:00) Nurimaru APEC House (19:00~22:00)
The chairmen of Logistic & Transportation from The commissioner of Local Tax Ofﬁce will ﬁrst give the Discussion on intense restructuring, massive unem- We are pleased to inform you that the EU Chamber
EUCCK will give a speech together with inviting Bu- most recent data of taxation and the forum will intro- ployment and job sharing, the pressure of economic will hold “2009 EUCCK Busan Year End Party” special-
san Port Authority ofﬁcers and Local Customs ofﬁce. duce the report based on the joint study by EUCCK slow-down and the overall economic recession. CEOs, ized network event to welcome the New Year. We are
The Logistics & Transportation committee constantly and Samil-PwC and connected with the just pub- CFOs, HR managers will come together and think of planning to have a fascinating night by inviting mem-
argues for more deregulation and better coordination lished tax legislation changes by MOSF. This meeting ways to overcome the issues they face in this crisis. In bers’ family and friends.
among various transportation facilities such as sea, air, is also open to ﬁnancial directors and tax managers of line with very successful Busan HR round table, you
roads, and railways. EUCCK members. will receive fruitful information by having productive
Spotlight The Royal Tombs of Joseon Dynasty
2009 UNESCO, World Heritage
The Royal Tombs of
The addition of the Royal Tombs of Joseon Dynasty to itage, they also epitomize the world view of Koreans, which Unlike many other tombs, the Joseon Dynasty tombs the Joseon tombs escaped that fate, with the unfortunate
UNESCO’s World Heritage List has resulted in people’s has been greatly affected by Confucianism, Buddhism, Feng have a variety of surviving documents related to their con- exception of Seolleung (of King Seonjong) and Jeongne-
heightened interest in the tombs. They stand out in a Shui and others. The royal tombs are especially unique in struction. Sanneungdogamuigoe, written about the con- ung (of King Joongjong). While construction technology
number of ways. Throughout the world, it is rare that one dy- their structure and artistic expression as seen in the stone struction of the royal tombs, even lists the names of low- played some part, the fact that only imitations of valuables
nasty lasts as long as 519 years, as the Joseon Dynasty did. ﬁgures that are part of the tombs. The advanced techniques level workers who took part in the construction, and explains were buried in the tombs was the main reason the tombs
Also, rare are tombs of kings and queens in as pristine con- and the temporal trends of Joseon stone arts are well rep- the arrangement of structures and the construction proc- remained untouched. This fact also shows that Koreans did
dition as the royal tombs of the Joseon. resented by stone rails and stone statues depicting scholars ess of T-shaped ritual houses in the tombs. Although most not see royal tombs as places kings can “rule” in the after-
Not only are the Joeseon tombs a valuable cultural her- and warriors in the tombs. tombs around the world have been subject to grave robbery, life, but as resting places.
Spotlight The Royal Tombs of Joseon Dynasty
The 33rd UNESCO World Heritage Committee listed Queen Dowager.
40 out of the 42 royal tombs of the Joseon Dynasty
(2 unlisted tombs are in Gaeseong, North Korea) wife of King Injo (the 16th king) (Dongguleung)
as World Heritage on June 26th , 2009. Thirty one Queen Jang-ryeol became Queen Dowager at the age
of the listed tombs are located in Gyeonggi-do. of 26 when King Injo died, and remained the elder of the
royal family through the reigns of three kings (Hyojong,
Hyeonjong and Sukjong). She and King Injo did not have any
children together. She became Queen Grandmother when
The Royal Tombs of King Hyojong died. Rival political cliques, Seoin and Namin,
the Joseon Dynasty in Gyeonggido ﬁercely argued about what kind of funeral should be held for
Queen Jang-ryeol who was King Hyojong’s stepmother.
Yungneung: the tomb of Jangjo (posthumous
title, birth name Yiseon) and Queen Heon-gyeong king) and Queen Myeongseong (Dongguleung)
Yiseon (1735~1762, also known as Crown Prince Sado) both in academics and martial arts, founded Gyujanggak to King Hyeonjong (1641~1674), the ﬁrst son of King Hyo-
was bright from an early age, and excelled in Korean cal- foster academic research, established Jangyongyeong (king’s jong, was the only Joseon king who was born abroad. He
ligraphy and martial arts. Unfortunately his clash with Noron guards) and had Suwon Hwaseong (fortress) built. During was born in Qing (China), where Crown Prince Bongnim (later
(literally old opinion: a political clique) during his regency on his reign, Joseon prospered. He continued King Yeongjo’s King Hyojong) was being held hostage after the Second
behalf of King Yeongjo led to his premature, horrible death political policy that aimed at curbing the ills of clique-led Manchu Invasion. King Hyeonjong reinforced the military and
where he was locked in a rice chest under the king’s order. politics, and planned to relocate the capital to Hwaseong Dongguleung overhauled the ﬁnancial system as part of the effort to re-
In 1762, King Yeongjo granted the posthumous title Sado (today’s Suwon). His wife Hyo-ui (1752-1821) was a model establish the ruling order of the Joseon royal family. He and
(literally thinking and mourning) on Yiseon, lamenting his ﬁlial daughter-in-law, faithfully attending on Hyegeong-goong Dynasty (Dongguleung) Queen Myeongseong (1642-1683) had Prince Sukjong and
son’s early death at the age of 28. When King Jeongjo, the (Queen Heongyeong). She died childless at the age of 69. Taejo (literally grand ancestor) Yi Seonggye (1335-1408) Princesses Myeongseon, Myeonghye and Myeongan.
son of Yiseon ascended to the throne, he elevated Yiseon’s founded a new nation in Gaegyeong (today’s Gaeseong) in
title to Jangheon, which was again escalated to Jangjo in Yungneung management ofﬁce (031)222-0142 hwaseong.cha.go.kr 1392. During his regime of 6 years and 2 months, King Taejo of King Gyeongjong (the 20th king)
1899. The title of his tomb was also upgraded to Yungneung, relocated the capital to Hanyang (today’s Seoul), named the Queen Dan-ui (1686-1718) was titled Princess in 1696
the tomb’s current name. Hyegeong-goong Hong (Queen new nation Joseon, and laid the ground work for the Joseon and later became Queen when King Gyeongjong was
Heongyeong) was named Princess in 1744 by King Yeongjo Gwangneung: the tomb of King Sejo Dynasty. crowned.
and received the title Hyebin after the death of Yiseon in (7th king) and Queen Jeong-hui
1762. She wrote a memoir titled Hanjoonrok, which reﬂects Sejo, the second son of King Sejong, led a coup in 1453 and Queen Hyeondeok (Dongguleung) and the second Queen Jeongsun (Dongguleung)
the death of her husband Crown Prince Sado, Yiseon. and took power after removing ministers including Kim Jong- King Munjong (1414~1452), the ﬁrst son of King Sejong, King Yeongjo (1694-1776) lived the longest-83 years-
seo and Hwang Inbo, who were trying to protect his nephew became Crown Prince at the age of eight and remained among Joseon kings and stayed on the throne for 52 years.
Contact Info: Yungneung management ofﬁce 031)222-0142 hwaseong.cha.go.kr King Danjong. In 1455 he made King Danjong abdicate the Crown Prince for 29 years, learning about politics and study- He adopted a policy (known as Tangpyeong) to cure the
throne; in 1457 he banished King Danjong to Yeongwol, ing academics. He ﬁnally became King in 1450, only to die ills of clique-run politics and took care of his people. Ironi-
Geolleung: the tomb of King Jeongjo where the abdicated died. Although King Sejo’s ascension to after two years in 1452 due to a fatal illness. His wife, Queen cally, however, his own son Crown Prince Sado fell victim
(the 22nd king) and Queen Hyo-ui the throne was immoral and unjust, his achievement as king Hyeondeok, also died a premature death in 1441 due to a to such clique-led politics. Queen Jeongsun, at the age of
As soon as King Jeongjo ascended to the throne he was quite impressive. He strengthened the king’s power and postpartum illness after she gave birth to King Danjong. She 15, became the second wife of 66-year-old King Yeongjo
clarified that he is “the son of Crown Prince Sado” and overhauled the system and institutions of Joseon. In order to was titled Queen after her death. and played a part in the death of Crown Prince Sado. She
made every effort to console the spirit of his father who died strengthen the king’s power, critically weakened during the remained in power well into the regime of King Sunjo (the
a harrowing death locked in a rice chest. The king, gifted reigns of ailing King Munjong and young King Danjong, he the ﬁrst Queen Ui-in and the second Queen Inmok (Dong- grandson of Crown Prince Sado), acting as regent. She did
reinstated the six-office system, which directly connected guleung) not have any children.
the king with six government offices (personnel, statistics, King Seonjo (1552~1608) ruled through the Japanese
education, military, judiciary and construction), and rein- Invasion of 1592 and the second Japanese invasion in 1597. and Queen SinJeong (Dongguleung)
forced the registration and identity tag system. King Sejo His effort to bring Joseon back to the pre-war state was King Munjo, the son of King Sunjo, governed on behalf
also established a national defense system through the Jin- not successful because of consecutive years of famine of the king as Crown Prince Hyomyoeng and adopted many
gwan (military system) and revamped the central defense and political instability. Queen Ui-in (1555-1600) was titled measures such as employing meritocracy, aiming for politics
system with the “Five Defense” system. He also focused on Queen in 1569 at a coronation for King Seonjo. The couple for the people. Unfortunately he died a premature death at
border security, twice defeating the Nuzhen, the Northern was childless. Inmok Kim (1584-1632) was named Queen the age of 22. Queen Sinjeong, by contrast, lived a long life
threat. Under his reign, a range of laws were amended and in 1602 and after four years gave birth to Lord Yeongchang, of 83 years and swayed the political scene during the latter
Gyeonggukdaejeon, the official code of governance, was the only legitimate son of King Seonjo. However, Gwanghae years of Joseon. She crowned King Gojong, the second son
written. (the king’s illegitimate son) had Lord Yeongchang killed and of King Father Heungseon, to keep the Andong Kim family in
Contact Info: placed Queen Inmok under palace arrest. A mutiny named check and remained a powerful regent.
Gwangneung management ofﬁce 031)527-7105 gwang.cha.go.kr Injobanjeong reinstated Queen Inmok and she became
Spotlight The Royal Tombs of Joseon Dynasty
king), the ﬁrst Queen Hyohyeon and the second Queen Hyo- she died from postpartum complications seven days after Seooreung king’s power and overhauling the overall social system of
jeong (Dongguleung) she gave birth to a prince (later King Injong). Joseon. After his first wife Queen Ingyeong died an early
Geongleung is the only tomb among the Joseon royal titled) and Queen Sohye (Seooreung) death, he wed Queen Inhyeon (1667~1701) in 1681. Queen
tombs that has three tombs built side by side. The tomb on Queen Inseong (Seosamneung) Deokjong (1438~1457), the ﬁrst son of King Sejo (the Inhyeon was dethroned, framed by Concubine Jang, and
the left belongs to King Heonjong (1827~1849), the middle King Injong (1515~1545), who sat on the throne for 7th king) was titled Crown Prince in 1455, but died a pre- then reinstated in 1694. She died of an unknown illness in
one to Queen Hyoheyon (1828~1843) and the one on the the shortest time among Joseon kings, was magnanimous mature death at the age of 20. Although Deokjong (Crown 1701. After one year King Sukjong married Queen Inwon
right to Queen Hyojeong (1831~1903). King Hyeonjong was and extremely devoted to his parents. When his father King Prince Uigyeong) was never crowned King, his second (1687~1757).
the son of King Munjo, who died prematurely when he car- Jungjong fell ill, he kept vigil by the bed day and night with- son’s (Prince Jaeulsan, later King Seongjong) ascension
ried the title Crown Prince Hyomyeong, and succeeded his out changing clothes or eating. After the king’s death, he is to the throne elevated his title to Deokjong. Queen Sohye of King Sukjong (the 19th king) (Seooreung)
grandfather King Sunjo to the throne. Because he was only said to have wept for ﬁve months, not even drinking water (1437~1504) became Princess in 1455 and gave birth to Queen In-gyeong (1661~1680) was titled Princess in
8 years old when he became King, Queen Dowager Sunwon for several days. Only nine months into his regime, he died the second son (King Seongjong), two months before De- 1671 at the age of 11 and became Queen when King Su-
acted as regent. Queen Hyohyeon became Queen in 1837, of an unknown illness. Queen Inseong (1514~1577) was ti- okjong’s death. She was very intelligent and wise, and wrote kjong was crowned in 1674. When she was 20 she died of
but died after six years. Taking her place, Queen Hyojeong tled Princess in 1524 and Queen in 1544, when King Injong the book Naehun on women’s etiquette. She also translated smallpox. She gave birth to two princesses, who both died
was titled Queen in 1843. King Heonjong and Queen Hyo- was crowned. a Buddhist script from Chinese writing to Hangeul (Korean young.
jeong had a daughter who died an early death. They did not writing). Upon learning that his mother was ordered to drink
have any other children. King Heonjong’s brutal suppression and Queen Cheolin (Seosamneung) poison and kill herself, Lord Yeonsan began to engage in wife of King Yeongjo (the 21st king) (Seooreung)
of Catholicism, as seen in the Gihye Persecution (1839), King Cheoljong (1831~1863), also known as “Young Boy immoral acts. Queen Sohye tried to reprimand him, which According to King Yeongjo’s writings, Queen Jeong-
claimed the lives of many Catholics. of Ganghwa”, was the great-grandson of Crown Prince Sado resulted in his assaulting her. Shortly after the incident, she seong, during the 43 years of her palace life, always greeted
(Jangjo). He was leading a farmer’s life in Ganghwado when died at the age of 68. him with a smile, loyally served the elders of the family, was
Dongguleung management ofﬁce 031)563-2909 donggu.cha.go.kr
King Heonjong died. Because the king did not have any chil- always diligent, and extremely devoted to attending to Suk-
dren, after much tumult, King Cheoljong became King at the and the second Queen Ansun (Seooreung) bin Choe, the king’s mother. She died childless at the age of 66.
age of 19. For the ﬁrst three years of his regime, Queen Sun- King Yejong (1450~1469) was the second son of King
Sareung: the tomb of Queen Jeongsun, won ruled Joseon as Queen Regent on his behalf. Although Sejo and ascended to the throne at the age of 19 when his
Seooreung management ofﬁce 02)359-0090 goyang.cha.go.kr
the wife of King Danjong (6th king) King Cheoljong governed after then, his kingdom was in fact bother Crown Prince Uigyeong (Deokjong) unexpectedly
Queen Jeongsun (1440-1521) was titled Queen in 1454 controlled by the Andong Kim family and the king’s power died. King Yejong also died an early death, only 14 months
and lived with King Danjong for three years until he lost the was extremely limited. Under his reign the national ﬁnance after his ascension. Queen Ansun (?~1498) became Prin- Yeongneung: the tomb of King Sejong
crown to his uncle Lord Suyang (later King Sejo). When King was shaken to the core and people were subject to desti- cess when Queen Jangsun, the first wife of King Yejong, (the 4th king) and Queen Sohyeon
Danjong was banished to Yeongwol, she was also banished tution, which led to a large-scale rebellion throughout the died from postpartum complications after giving birth to King Sejong (1397~1450), the third son of King Taejong,
from the palace and was degraded to Lady, never to see South and the rapid spread of Donghak and Catholicism. Prince Inseong, and was titled Queen upon King Yejong’s as- was titled Prince Choongnyeong in 1408, and later titled
King Danjong again. She lived in Yeonmijeongdong outside The legitimate son he had with Queen Cheolin (1837-1878) cension. Crown Prince when his oldest brother Prince Changneong
Dongdaemun, longing to see her husband for the rest of in 1858 died early, and the King died without heir. Princess lost the title. After two months he ascended to the throne.
her life. Upon learning that King Danjong was murdered at Yeonghye, who was born to King Cheoljong and Concubine king), the second Queen Inhyeon and the third Queen Inwon King Sejong sat on the throne for 32 years and promoted
the age of 17, she is said to have climbed the top of Dong- Beom, was wed to Park Yeonghyo, but also died an early (Seooreung) development in various ﬁelds such as politics, economy, cul-
mangbong (mountain peak), behind Jeongeubwon (today’s death. Despite fierce political wars waged between cliques, ture and science. His achievements include the creation of
Cheongnyongsa Temple), everyday, looking in the direction King Sukjong (1661~1720) succeeded in strengthening the Hangeul, the installtion of Jipheonjeon (a research institute)
Contact Info: Seosamneung management ofﬁce 031)962-6009
of Yeongwol, mourned her husband’s death. After Queen and Yukjin (six defense strongholds against the threat from
Jeongsun died at the age of 82, her tomb was named Sare- the North), the conquest of Tshushima (of Japan) and many
ung (literally missing tomb) because she had missed King others. His focus on science and technology led to many
Danjong all her life. She didn’t have any children. When King innovative inventions like Cheugugi, a rain gauge. Queen
Danjong was reinstated in 1698 by King Sukjong, she was Sohyeon (1395~1446) had eight sons and two daughters,
also reinstated to Queen. more children than any other Joseon Queens. It is said that
she was so impeccable in carrying out her duties that no
Sareung management ofﬁce 031)573-8124 sareung.cha.go.kr
concubines talked ill of her.
Limited opening (If the visit is for research or ﬁeld investigation, you can apply
for entry at the management ofﬁce) Contact Info:
King Sejong Cultural Heritage Admin. 031)885-3123
Nyeongneung: the tomb of King Hyojong
wife of King Jungjong (the 11th king) (Seosamneung) (the 17th king) and Queen Inseon
Queen Jang-gyeong(1491~1515) became Queen in King Hyojong (1619~1659, Prince Bongnim), the second
1507 when the first Queen Dan-gyeong was dethroned son of King Injo, was given as a hostage to Qing with his
amidst a scandal implicating her father, Sin Sugeun. In 1515 brother Crown Prince Sohyeon after the Second Manchu
Spotlight The Royal Tombs of Joseon Dynasty
1897, but died before King Sunjong was crowned. Her grave Pajusamneung
was placed in today’s Neungdong Children’s Grand Park and
later transferred to her current tomb site when King Sun- of King Yejong (the 8th king) (Pajusamneung)
jong died. Queen Sunjeong (1897~1966), the second wife Han Myeonghee, the father of Queen Jangsun
of King Sunjong, lived through the Japanese Aggression, the (1445~1461), had a strong desire for power and arranged
Liberation of Korea and the Korean War, and was converted for his daughters’ marriage with the royal family. Queen
to Buddhism at a later stage in life to alleviate her sorrow. In Jangsun, who was beautiful and virtuous, was chosen to be
1966 she died childless at the age of 73. Princess by King Sejo, her father-in-law, but died a prema-
ture death at the age of 17 due to postpartum complica-
Hongyureung management ofﬁce 031)591-7043, 592-0821
Queen of King Seongjong (the 9th king) (Pajusamneung)
Jangneung ( Paju): the tomb of King Queen Gonghye (1456~1474) was another daughter of
Injo (the 16th king) and Queen In-yeol Han Myeonghye and a sister to Queen Jangsun. She joined
King Injo (1595~1649) succeeded in removing Lord the royal family at an early age and was beloved by the
Gwanghae and the majority political clique, and ascended elders for her courtesy and piety. She died childless at the
Invasion. Upon the unexpected death of Crown Prince So- Contact Info: to the throne. Because of Yigwal’s Rebellion (1624), the First age of 19, only ﬁve years after she became Queen.
Olleung management ofﬁce 031)855-5228 Manchu Invasion (1627) and the Second Manchu Invasion
hyeon in 1645, he was named Crown Prince and ascended
Limited opening (If the visit is for research or ﬁeld investigation, you can apply
to the throne in 1649. King Hyojong brought back order for entry at the management ofﬁce) (1636), he had to leave Seoul and seek refuge respectively Jinjong and Queen Hyosun (Pajusamneung)
to Joseon by reducing tax burden and reforming the cur- in Gongju, Ganghwado and Namhansanseong. Joseon’s King Jinjong (1719~1728), the ﬁrst son of King Yeongjo
rency system. He also adopted a spirited military policy Hongneung: the tomb of King Gojong defeat in the Second Manchu Invasion subjected him to (the 21st king), became Crown Prince when he was seven,
aimed at defeating the North. He died at the age of 41 in (the 6th king) and Queen Myeongseong the shame of “three times’ bow on the knees and nine but died after three years. King Yeongjo, then, granted the
1659, without realizing his military ambition. Queen Inseon King Gojong (1852~1919) was the second son of King times’ bow with the head down” to Qing’s representatives in title on King Jinjong’s half-brother, widely known as Crown
(1618~1674) was sent to Qing with King Hyojong and there Father Heugseon (Yi Haeung) and was named King by Samjeondo. Queen In-yeol (1594~1636) gave birth to Crown Prince Sado. But Crown Prince Sado was killed amid a clash
gave birth to King Hyeonjong. She was titled Queen when Queen Sinjeong, the wife of King (posthumously titled) Ik- Prince Sohyeon, Prince Bongnim (later King Hyojong) and between cliques, locked in a rice chest under the king’s or-
King Hyojong was crowned. jong (Crown Prince Hyomyeong), when King Cheoljong died Prince Inpyeong. She died of postpartum illness shortly after der. Crown Prince Sado’s son, King Jeongjo, succeeded King
without heir. King Gojong and Queen Myeongseong were Prince Yongseong’s birth. The tomb was originally in Unche- Yeongjo to the throne. As King Jeongjo attained kingship,
Contact Info: wed in 1886 and lived through one of the most tumultuous olli, Northern Paju, but later moved to the tomb’s current lo- his stepfather was posthumously titled King Jinjong. Queen
King Sejong Cultural Heritage Admin. 031)885-3123
times of Joseon. His reign suffered through the Military Mu- cation because snakes and scorpions had been seen living Hyosun, the wife of King Jinjong (1715~1751) outlived her
tiny of 1882, the Coup of 1884, the Revolutionary Uprising of in the tomb. husband and died childless at the age of 37.
Olleung: the tomb of Queen Dan-gyeong, Donghak Peasant Army, the Sino-Japanese War (1894), the
Contact Info: Contact Info:
the ﬁrst wife of King Jungjong (11th King) Murder of Queen Myeongseong (1895), the King’s Retreat Paju Jangneung management ofﬁce 031)945-9242 Pajusamneung management ofﬁce 031)941-4208 paju.cha.go.kr
When King Jungjong (Prince Jinseung) deposed Lord to the Russian Legation (1896) and the Russo-Japanese Limited opening (If the visit is for research or ﬁeld investigation, you can apply
Yeonsan and ascended to the throne, Queen Dan-gyeong War (1904). Queen Myeongseong was murdered by Japa- for entry at the management ofﬁce)
was named Queen. However, she was dethroned only seven nese assassins in 1895. King Gojong stepped down from the Admission Information on the Royal Tombs of the Joseon Dynasty
days after the ceremony and banished from the palace be- throne in 1907 and died in 1919. The queen’s tomb, which Jangneung ( Gimpo): the tomb of King
cause ministers petitioned that her presence in the palace was initially in Cheongnyangnni (today’s Hongneung Tree (posthumously titled) Wonjong and Queen Inheon
was improper given her relationship with traitor Sin Sugeun, Garden), was moved to its current location to join King Go- King Wonjong (1580~1619), the father of King Injo (the March-October November-February
her father. He was Lord Yeonsan’s brother-in-law and Senior jong’s tomb, when the king died. 16th king), was never crowned King during his lifetime; the Ticketing Opening Ticketing Opening
Minister, but was killed when Lord Yeonsan was ousted. The title was posthumously granted when his son became King.
Contact Info: 09:00~17:30 09:00~18:30 09:00~16:30 09:00~17:30
dethroned queen died childress at the age of 71. She was He was the ﬁfth son of King Seonjo (the 14th king) and is
Hongyureung management ofﬁce 031)591-7043, 592-0821 *Holiday : Every Monday (Yeongwol Jangneung is open everyday between 9 a.m. and 6 p.m.)
posthumously reinstated to Queen in 1739 by King Yeong- geumgok.cha.go.kr said to have been favored by the king because he was hand- *The opening hours may vary for individual tombs.
jong and the titles of her grave and tomb were changed to some, cautious and a great son and brother. He and Queen
respectively Dan-gyeong and Olleung. Although Olleung, Yureung: the tomb of King Sunjong Inheon (1578~1626) had three sons, the oldest of which,
consisting of only the Queen’s tomb, does not have stone (the 7th king), the ﬁrst Queen Sunmyeong Lord Neung-yang, raised a rebellion (Injobanjeong) and be-
rails or stone screens, it has small walls to protect the tomb. and the second Queen Sunjeong came King Injo. When his son became King, he was titled Category Individual Group
One pair of stone sheep and another of stone tigers were King Sunjong (1874~1926), the second son of King King Father and the title of his tomb was elevated to Hong- Adults as listed by the head of Cultural 20 percent discount for
placed to protect the tomb, and a pair of scholars to assist Gojong and Queen Myeongseong, ascended to the throne wongeong. He was titled King in 1632, which resulted in new (age 19~64) Heritage Administration of Korea groups of 20 or more
the queen. The tomb also has a square-shaped stone for in 1907. Shortly after then, in 1910 Korea became a Japa- names for his grave and tomb, Wonjong and Jangneung. Children 50 percent of adult admission fee 20 percent discount for
the spirit to sit on, a lamp to disperse the evil, and a pair of nese colony. King Sunjong’s death in 1926 led to a large (age 7~18) groups of 10 or more
stone posts signaling the status of the tomb. scale anti-Japanese demonstration on his funeral day, June
Jangneung management ofﬁce 031)984-2897 jangneung. cha.go.kr * Admission fee and Parking charge may vary for individual tombs.
10. Queen Sunmyeong (1872~1904) was titled Princess in
Korea Sightings Yanhwajin Foreigners’ Cemetery
As someone once said, death is a part century it was not considered normal often a sacrificial stone or mini-altar
Welcome to a unique cemetery in Hapjeong- of life too. Visiting an old cemetery can or desirable for people to be buried in before it, where people can perform
dong, Mapo-gu district of downtown Seoul, reveal hints of so many interesting sto- a common graveyard, centered around ancestral veneration ceremonies.
ries of the past. Traditionally in Korea, a church or other religious center. But There is in Seoul one cemetery
where some of the noted foreigners who people – if they could afford it – were the coming of modernization, popula- that stands out from all this: the Yang-
buried in individual plots on a moun- tion growth and rising costs of land hwajin Foreigner’s Cemetery. Ever since
made a big difference in modern Korean tainside with speciﬁc geomantic condi- have changed that. Still, one hallmark King Kojong gifted this land to the
society rest in peace. tions (the Koreans call it “pung su”; the of a Korean cemetery is that there is a growing foreign community in the late
Chinese “feng shui”). Before the 20th raised mound above each grave, and 1800s, this hallowed ground has come
Korea Sightings Yanhwajin Foreigners’ Cemetery
to hold the remains and tombstones the Korean ﬂag and a ﬂag of the cem- saw no fighting, it seems that shots this family’s history is right here in this
(not every person memorialized there etery itself. were taken at some tombstones – par- graveyard, written on the gravestones
actually lies buried there) of over 500 Until a couple of years ago, Yang- ticularly those of white Russians – as and a special plaque. Some of the
people. hwajin Foreigners’ Cemetery was under some are pockmarked and damaged stones are English on one side and Ko-
On a recent visit to the cemetery, the stewardship of the Seoul Union beyond legibility. rean on the other.
the weather was ideal. Young children Church, which was a church formed Throughout the cemetery there are Two Americans who this author
from a local kindergarten were playing by foreign missionaries of several de- signs showing maps for each of sec- had never heard of, Clarence Ridgley
with their teachers in a park beside nominations in the early 20th century tions labeled A to I. Some of the more Greathouse and Brigadier General
the cemetery, and some grounds staff to serve as a home church for their prominent missionary and other graves Charles W. Legendre are buried here.
were weeding and cleaning around the families, where services would be held are pointed out here. After having worked in Japan, the
graves. There were not many visitors, in English. In the last couple of years, former as a consul and the latter as an
perhaps because the place doesn’t management of the cemetery and the Every stone a story advisor, both men arrived in Korea in
feature too prominently on most peo- building on it has been taken over by There are many tales to tell. During 1890, and worked for the Royal Court
ple’s tour itineraries. But for anybody a Korean Church – the Hundredth An- Japanese occupation a young British of Joseon as advisors to King Kojong,
who has lived in Korea long enough to niversary Church. This church sees man by the name of Ernest Bethell before dying in the same year, 1899.
learn some of its history, this is a must- itself as the keeper of the memory of came to Korea to found a newspaper Also here is Homer Hulbert. While
see destination. the work by foreign missionaries to – the Daehan Maeil Sinbo – although an American missionary, he was also
To find the graveyard, the easi- spread the gospel in Korea. Hence the he was later imprisoned for offending a passionate supporter of Korean in-
est thing to do is take the subway to cemetery has been relabeled “Yang- the Japanese colonialists and had his dependence from Japan from early in
Hapjeong, which lies at the intersec- hwajin Foreign Missionary Cemetery” newspaper taken from him. He died in the 20 th century. After writing books
tion of lines 2 and 6. Come out of exit by the church, and some effort has 1909 and his grave is here. The stone and articles (including one in National
7 and walk straight ahead. Cross the been made to play down the contribu- is well kept and ﬂowers are still placed Geographic magazine) in support of a
first street, and you will see to the tions made by non-religious foreigners here. free Korea, he was harried out of the
left of you what appears to be a long whose memories are kept here. One large group plot near the back country by the Japanese colonial au-
above ground tunnel snaking off to the Nevertheless, their stories are here contains several generations of the thorities. When he returned after the
left. This is where the line 2 subway to see on their gravestones. And what Underwood family, who served Korea Second World War, it was to a divided
train comes up from underground to a stunning variety there is, too. Some in so many ways: by founding what be- and fractured Korea. He died in August old man being taken care of by grateful the right of the main entrance.
cross the Han River. You need to walk of the oldest stones have worn away, came Yonsei University, the Saemunan 1949, too soon to see the tragic war former orphans. Near the Yanghwajin Foreigners’
downhill on the far side of this tun- while others have stood the test of Presbyterian Church, medical mission- that came in the following year. On his There are many other sections Cemetery, on the other side of the park
nel, so walk through the small bricked time. During the Korean War, Chinese ary work, ﬁghting in World War Two and gravestone are written the words “I worth seeing, such as American serv- and the above ground railway tunnel,
rest-stop and turn left. Go about 100 and North Korean troozps camped the Korean War, promoting education would rather be buried in Korea than in icemen and their family members (not is a shrine to Catholic martyrs, known
meters, past the police station on your near here. While the cemetery itself in Korea, and so on. Over a century of Westminster Abbey.” soldiers who fell in the Korean War, as Jeoldusan. It is here that Korean
right, and you will see an array of ﬂags. One of the more unusual grave however, they are elsewhere), a poign- Catholic converts by their thousands
This marks the entrance to the cem- markers is the tall stone column that ant infant section, the grave of Ehwa were beheaded and thrown off a cliff
etery. marks the grave of British Consul to Woman’s University founder Mary in the late 19th century by the prince
The burial ground is intimately Seoul Henry Bencraft Joly (d. 1898). Scranton, Italian diplomats who died regent Daewon-gun, who was angry
bound up with the history of Christian One side is carved entirely Chinese let- over a century ago, but whose graves at a French warship attack on Korea
missionary activities in Korea, even ters, while the other side once held Ro- are still visited and decorated by the in retaliation for the execution of nine
though less than 200 of the 550 or so man letters that have since fallen off, Italian embassy today, and much more. French priests. This place is also worth
headstones here belong to missionar- making reading the name or inscription The cemetery has a website, a visit. Pope John Paul II visited here on
ies. The ﬁrst person to be interred here, very difﬁcult. The column itself is very which is run by the 100th Anniversary his trip to Korea in 1984.
J.W. Heron, was an American Presbyte- decorative, and topped with what ap- Church. The site is entirely in the Ko- Taken together, these places of
rian evangelist who died at the age of pears to be a representation of an urn, rean language, except for some titles. memorial for those who have passed
33 in 1880. Workers from many major although from behind it could be mis- The cemetery is open to the public away can make a fascinating and relax-
world Protestant denominations – the taken for an owl. most days, and tours are run daily, at ing, contemplative day trip right in the
Methodists, the Salvation Army, the Very close by is the only Japanese 10 a.m. and 11:30 a.m. and at 2 p.m. heart of Seoul.
Baptists – are buried here. The flags person buried in the cemetery: Soda and 3:30 p.m. English tours are avail-
by the entrance of the park represent Gaichi (1867-1962). He worked tire- able, but must be booked through the
the countries whose missionaries are lessly for over 20 years looking after website (look for the words “Visit Res-
buried here: Australia, Canada, Japan, Seoul’s orphans, until the Japanese sur- ervation” on the website) in Korean, so This article is written by Jacco Zwet-
Sweden, Great Britain, the United render in 1945. Invited back in 1961, he have a Korean friend help you do that. sloot, Korea.net Staff Writer and Editor.
States of America. They are ﬂanked by spent the last of his days as a 94-year- Tours start from the education hall, to Reprinted with permission.
A Very Special 1 Year Anniversary at Lotte Hotel Seoul
PIERRE GAGNAIRE à Séoul & PIERRE’S BAR
Lotte Hotel A Genuine Autumn Relaxation At Park Haytt Seoul
“Park Experience Package”
In 2008, Lotte Hotel Seoul opened PIERRE GAG- will surely win the hearts of the Korean people. It events like make-up showcase and lingerie fashion To avoid the summer heat and surging crowds water is falling into the middle of the city in an ex-
NAIRE à Séoul, the ﬁrst restaurant in Korea run by is composed of Pierre Gagnaire’s most-loved dish- show. Complimentary vodka cocktail, beverages at vacation destinations, an increasing number perience that is exclusive to Park Hyatt Seoul.
a 3-star Michelin chef, and PIERRE’s BAR, es which use Korean food ingredients that have and food will be served. The evening is composed of people are planning a belated vacation in the Enjoy a luxurious getaway with full beneﬁts this
been reinterpreted in a new style. It is a testament of part one and part two, and male guests will not autumn. This year, Park Hyatt Seoul presents the autumn season with Park Hyatt Seoul’s “Park Ex-
the Ladies’ Floor, an exclusive floor for female to the possibility of Korean cuisine’s globalization. be invited to the second part of the party. “Park Experience Package” as a relaxing getaway perience Package”, perfect to make unforgettable
travelers, in the aims of becoming a global leading (Price 160,000 won, VAT & service charge exclud- in the city, made even more rejuvenating with memories with your loved ones. Prices start from
hotel in commemoration of its 30th anniversary. ing) * Inquiries: PIERRE’S BAR Tel. (02) 317-7183~4 the warm sunshine and cool breezes of perfect KRW 260,000.
PIERRE GAGNAIRE à Séoul and Ladies’ Floor cel- autumn weather. The package offers one night’s
ebrate their one year anniversary this fall. Special * Inquiries: PIERRE GAGNAIRE à Séoul accommodation in a luxurious guestroom, a bottle Period September 1 – November 30
events are lined up for this very special occasion. Tel. (02) 317-7181~2 of premium red wine and a special discount on Price From KRW 260,000 (prices vary depending
breakfast or Weekend Brunch at Cornerstone. a bottle of Chateau Bellevue red wine will help you on the room type chosen)
First anniversary of PIERRE First anniversary of PIERRE’s BAR! With a comfortable, relaxing bed and a spa- celebrate the autumn season with the full happi- Inclusions One night’s accommodation in a luxu-
GAGNAIRE à Séoul! PIERRE’S BAR opened in October 1, 2008, togeth- cious spa-inspired bathroom, Park Hyatt Seoul’s ness. rious guestroom / One bottle of Chateau Bellevue
er with PIERRE GAGNAIRE à Séoul. In celebration luxurious guestrooms have a 3.4m ceiling and Served in Cornerstone, “The Park” breakfast, red wine (valued at KRW 70,000) / Free access to
PIERRE GAGNAIRE à Séoul opened on October 1, of its ﬁrst anniversary, this hip nightspot offers an surrounding glass windows. Breathtaking night which is available every weekday, or the Week- the Fitness Studio, Swimming Pool and Sauna
2008. Celebrating its one year anniversary, a very unforgettable event for the female guests. views of the city’s marvelous autumn scenery and end Brunch, which has revolutionized Gangnam’s Optional Special discount on breakfast (KRW
special course menu “HOMAGE A SEOUL” is cre- brunch culture with the utmost quality and incom- 25,000) or Weekend Brunch (KRW 45,000)
ated to convey deep appreciation to guests who Manager Frederic Hartwig will stage a special parable uniqueness, added to the package at spe-
have given warm and loving support over the past event on October 9 from 6:00 pm to 2:00 am. cial rates. * For reservations, please contact
year. The French word homage means reverence, Inspired by the Muses, Zeus’ nine daughters pre- The package also offers free access to the Fit- (02) 2016-1234 or (02) 2016-1100.
respect, and appreciation. siding over the arts and sciences in the Greek ness Studio, Swimming Pool and Sauna, located * All prices are subject to a 10% government tax:
mythology, the party is titled “Muse Party”. The on the top floors of the hotel. Surrounded by no service charge applies.
Offered from October 5 through 28, this course evening is oriented to the female guests with 3.4 m floor-to-ceiling windows, the infinity pool PR Contact: Janet Lim (02) 2016-1258 or
provides unique views and makes it feel as if the (010) 9954-2403 / email@example.com
Saturday Brunch Package Grand Hyatt Special 2009 Chooseok Packages
At W Seoul-Walkerhill W Seoul-Walkerhill
Grand Hyatt Seoul presents a relaxing “Saturday Period Until December 18, 2009 (Friday night [14 September 2009] W Seoul-Walkerhill of W Ho- 27th until October the 9th, it is designed to meet Choice for the special Chooseok holiday in
Brunch Package”, which includes a relaxing one stays only) tels – the world’s foremost “style” hotel brand of the needs of hotel guests especially during this the urban center – W sWagger package
night stay in luxurious accommodations, followed Price From KRW260,000 (Exclusive of tax & serv- Starwood Hotels & Resorts Inc. (General Manager: holiday. Discover what W Seoul-Walkerhill’s Choo- Celebrating the best Korean Chooseok holiday
by a sumptuous Saturday brunch at The Paris Grill ice charge) Nick Heath , / www.wseoul.com) offers two special seok package will propose. at W Seoul-Walkerhill, W hotel presents its own
to help you banish the week’s stress and tension, Includes One night’s Grand Room accommoda- packages for relaxation during this Chooseok holi- special package. One of the attractions is that you
available only on Fridays. tion / Saturday Brunch at the Paris Grill for 2 per- day period. The package valid from September the The perfect escape that relaxes your ex- can chill out in the urban center resort, W hotel.
Enjoy a fascinating Friday night and a leisurely sons / Complimentary use of Gym & Indoor Pool / hausted body and mind -W ReWard Package One night with view of Acha Mountain at Won-
Saturday brunch at Grand Hyatt Seoul. The pack- 50% discount at the Sauna Through this Chooseok holiday, W Seoul- derful room, unlimited beer and wine at Woobar,
age features accommodation in a Grand Room, Walkerhill has created W Reward package for la- located on the ﬁrst ﬂoor, from 6pm unil 9 pm and
followed by a delicious Saturday brunch at The * Information & Reservations: 02-799-8888 dies who are especially stressed in this period and other drinks and food can be produced with 10%
Paris Grill for two, normally priced at KRW55,000 Contact: Yoon Jung Hwang (PR Coordinator) this will be a great choice for them to relax. One discounted price. (Week days includes / Fridays,
per person, complimentary use of the gym and Phone: (82)(2) 799-8277 night at a Wonderful room and its view of Acha Saturdays, Sundays, max 6 glasses can be given,
indoor pool, and a 50% discount at the sauna. E-mail: firstname.lastname@example.org mountain with the contrast of red and white color free of charge). Two glasses of cocktail, Bloody
The Paris Grill brunch offers a sumptuous array bed sheets, special Chooseok buffet menu for Mary will be served to your room in the morning
of brunch selections. You’ll ﬁnd our buffet tables two, indoor swimming pool “WET”, and sauna (WA- and two bottles of sparkling Voss water are there
brimming with selections from the restaurant’s TER Zone) for two are included in the package. for you. Pricing from KRW290, 000 (tax and serv-
daily breakfast, lunch and dinner menus, treat- Furthermore, manicure and mini hand massage ice charge exclusive).
ing diners to the best of the best. Package price service vaucher for one that women love and 30% Why not ﬁnishing up your holiday at W Seoul-
starts from KRW260,000 (exclusive of tax & serv- off at Style Lab coupon are provided. Lastly, vari- Walkerhill where you can getaway from the urban
ice charge). Treat yourself to a relaxing weekend ous spa treatments at Away Spa are available with center and relax.
and kiss your stress goodbye, with a Saturday the 10% discounted price. Starting from KRW249,
Brunch Package at Grand Hyatt Seoul. 100 (tax and service charge exclusive).
* When staying for more than two nights, one night
is available from KRW150, 000 (breakfast for two /
up to 3 nights max / tax and service charge exclu-
Authentic Italian Cuisine Festival at Urban
Hotel ‘Italian Special Cuisine’ Promotion
Grand Ambassador Film Festival Package
Grand Ambassador Seoul welcomes the arrival of al Salmone, Veal Parmigiana & Mixed grill. Also, Paradise hotel busan will be presented ‘Film Festi- ming pool for free. Besides 50% discount at indoor
autumn 2009 with ‘Italian Special Cuisine’ through Italian-style appetizer buffet is available for lunch val Package’ from Oct. 9 to Oct.15. sauna, 20% discount for screen golf, 10% discount
end of October. The promotion, available at ‘Café while sparkling wine is complimentary for dinner. at our restaurant and welcome gift will be present-
de Chef’, is directly organized by the executive The Lunch Sets are available at 38,000won (Marco This package includes one night stay at Deluxe ed.
chef, Mr. Wayne Golding from menu selection to Polo Set) and 42,000won (Leonardo Da Vinci Set) room, breakfast for 2 persons at Escoffier and Remember! This package will be offered for 10
cuisine decoration in order to present a distinctive while Dinner Set (Michelangelo Set) is priced at various beneﬁts. It will be provided at 275,000won, persons everyday on a ﬁrst-come-ﬁrst-served ba-
glimpse of authentic Italian cuisine. 60,000won (subject to a 10% VAT). additional charge will be added by room type. (10% sis.
The promotion features course menus with service charge and 10% tax will be added.)
various main dishes including Fettuccine Car- You can use our exotic outdoor spa and swim- * For more information, please call (051)749-2111~3.
bonara, Chicken Cacciatore, Parmigiano Halibut, * Information & Reservation:
Grilled Angus Sirloin, Seafood fettuccini, Prosciutto Café de Chef at 02-2270-3131
About Artnouveau City
About Artnouveau City Pullman Ambassador
Hotel Changwon CITY 7 Pullman Ambassador
Consisted of 226 rooms each equipped with top- · Free Breakfast Let’s visit the best of the city, CITY 7. Our premi- Host to many of the best acts to play in
level furniture and convenient facilities, Artnouveau · 24-hour Security Service umere destination in the heart of Changwon city. It Changwon city, the 310 seat CITY 7 theatre fea-
City is for your comfortable rest based on the high- · Daily Housekeeping Service, Laundry & Dry is business destination featuring CECO convention tures state of the art technology in staging and
tech security system and 24-hour concierge serv- cleaning centre, industrial complex, and Masan Free Trade cinema facilities-perfect for local and international
ice. · Wake-up Call & Message Service Area. events.
Artnouveau City offers residence suites for · Mail & Delivery Service
business travelers with Crystal Suite, Sapphire · Traveler’s Guide Service Pullman Ambassador Hotel in CITY 7
Suite and Emerald Suite, and provides highly- · Hospital Guide & First-aid Service Offer a range of 5 star facilities & services to make * Tel: 055-600-0700 / 0707 or
digniﬁed comfort carefully tailored to demands of · Iron, Ironing Board, Drying Cart Rental your stay comfortable. With array of delicious cui- email at email@example.com
each customer through luxurious interior design · Humidiﬁer, Microwave Oven, Transformers Rental sine more than over 20 restaurants and bars. And www.thecity7pullman.com
and hotel-level service. · Baby Crib Rental also once you step out from the Hotel there are www.accorhotels.com
Artnouveau City provides home entertainment CITY 7 shopping mall, it has just about 200 shops
system, systematic kitchen furniture, drum washer, Rate (excluded 10% VAT) with various seasonal sales on now till October 31.
high speed internet access and hotel services. We Crystal Suite (52.07m2 / 560ft2) : 174 rooms
have various convenient facilities such as sauna, 132,000won (Daily), 3,300,000won (Monthly) Pullman Musical Theatre
ﬁtness club, business center, bar and restaurants Sapphire Suite (65.22m2 / 702ft2) : 44 rooms It opens on October 15th, with famous Broadway
so that you can enjoy comfort life. On the roof, sky 180,000won (Daily), 4,500,000won (Monthly) musical “The show girl.” You may be able to enjoy
garden offers various rest places and Breakfast is Emerald Suite (117.25m2 / 1262ft2) : 8 rooms the performance from Tuesday through Friday,
served at the sky lounge on the 18th ﬂoor with a 270,000won (Daily), 6,750,000won (Monthly) and performing twice a day only (3pm or 7pm). It
fantastic view for free. costs only 40,000(won) but 7pm performances are
Artnouveau City which is located beside * 701-1 Yeoksam-Dong Gangnam-Gu Seoul Korea, 50,000(won).
Teheran-ro is famous for a good position because 135-080 If you want a big night out, than chose PRIMA
of convenient trafﬁc, shopping and business sur- Tel : 82-2-560-9000 DONNA package. You can stay over a night at ho-
rounding. E-mail : firstname.lastname@example.org tel at CITY7, 2 theatre tickets and breakfast for 2
www.ancsr.com next morning that cost only 180,000(won).
Upscale Authentic Japanese
Sheraton Incheon “Full Moon Package”
The Imperial Palace
Miyabi is a term that was used in the Japanese * Open from 12:00 - 2:30, 18:00 - 21:30 The Imperial Palace Hotel presents the “Full Moon
royal court and means “elegant” and “beautiful.” Location: 2nd Floor Package” for a plentiful harvest holiday “Chuseok”,
Taking inspiration from that heritage, the restau- Lunch Set from KRW 39,000 to KRW 70,000 which is one of the most important holiday of Ko-
rant has seating for 98 including booths and seats Dinner Set from KRW 50,000 to KRW 150,000 rea.
with views and four private rooms with Zen-motif Reservations: 032) 835-1714/5
interior design. Of the four private rooms, three The package is offered from October 1st till Oc-
offers seating on tatami style and one is Western- tober 4th. The cost for this package is 115,000
style with a table and chairs. These rooms can ac- won(including tax and service charge). With this
commodate from eight to 12 persons. reasonable price you can enjoy one night in a
Miyabi offers a variety of choices from sushi superior room. If you stay 2 nights the price will in-
and sashimi to full course menus. As accompa- crease to 200,000 won. For Deluxe Room the price
niment to your meal, our high quality premium is 150,000 won for one night and 250,000 won for
sake brewed in the mountains of Japan is recom- two nights. Add 4~50,000won for a breakfast buf-
mended. You may also choose to dine at our Raw fet for two at our Café “Amiga”. (taxes and service
Bar and enjoy fresh sushi and sashimi. However charge not included)
the thrill of dining at Miyabi comes as you watch Besides, you may use our fitness center and
our chefs prepare teppanyaki (recommendation: the indoor swimming pool for free and get a 10%
Wagyu beef prepared with your choice of teriyaki discount in any Restaurant. (Food only)
Miyabi, featuring a dynamic contemporary atmos- or wahu balsamic sauce) and robatayaki (try aba-
phere and genuine Japanese delicacies, opened lone or prawn with either teriyaki or miso sauce). Date 1st October 2009 ~ 4th October 2009
its doors on September 2, 2009 at the environ- In celebration of the hotel’s opening until Sep- Price from 115,000 (tax & service charge
mentally-friendly Sheraton Incheon Hotel located tember 20 if you purchase one bottle of wine at included)
in Songdo, Incheon’s International Business Dis- any one of our restaurants you receive a compli-
trict. (www.sheratonincheon.co.kr) mentary bottle of wine as our gift. * Reservation and information 02-3440-8000
Novotel Daegu City Center
The only International Hotel in Daegu Novotel Daegu LOUND of Trendy
Lounge place Café 74
“Executive package” Authentic Food Pleasures @ the Square
The Square Restaurant offers the international buf- Let’s party at Round!
Novotel Daegu City Center is located in the heart
fet featuring the best of Asian and Western food
of the business & shopping district, with just min- Are you planning to have a party in this autumn?
with its interactive live cooking stations. A splendid our traditional French dinner menu, with wines and
utes away from the station, airport and Daegu
view over the city makes the Square and its open cocktails within 100,000 won per person.
EXCO. Throughout 2009, Novotel Daegu City Round at Cheung-Dam has an event to provide the
air terrace for the ideal place for a business lunch
Center offers a special room package for business whole 4th ﬂoor to customers who want to party.
or an enjoyable get together dinner. Round’s terrace setting guarantees to provide the
Throughout October, the Square restaurant perfect place to have a party and have a round of
- Accommodation in Executive Room Plan for birthdays, launch a brand or various
offers special promotions! Weekday Lunch Buffet singing with our brand new karaoke machine!
- VIP buffet breakfast at the Executive Lounge events suited to your needs at Round, and Round
with fresh sushi & sashimi, ﬁnest roast beef, a wide
- Free access to Sauna & Fitness center will assure you and your guests VIP treatment.
variety of desserts and Escargots of French Style * www.74LOUND.com
- Complimentary internet (High speed & wireless) Dinner courses may be arranged, which extends to
is only 19,000 KRW. For dinner with lobsters, buy 5 +822-517-7412 LOUND
- Free drinks and snacks for Happy Hours
and get 1 lunch buffet voucher free.
(18:00~20:30) at the Executive Lounge
* For enquiry and reservation
Price KRW 159,000+ only (10% VAT will be add-
ed) / Supplement Executive Suite: + 45,000 KRW
Special “Family @ Novotel”: Free accommodation
and breakfast for 2 children under 16 years old
* For enquiry and reservation
Special Promotions for the online
corporate program for SMEs :
* Lounge Access ia which you can ﬁnd only at Cathay Paciﬁc. Leave
* Free Upgrade chance for the repeated travelers your cares behind in the cozy surroundings of our
* Special gift for the ﬁrst trip new Business Class with its exceptional comfort
and enhanced privacy.
Basic beneﬁts for Small Business Solution
* Highly competitive Business & Economy class Selling period: From now – 21 Oct. 2009
fares on Cathay Paciﬁc Airways and Dragonair.
* Complimentary Marco Polo Club Membership
(Green Card) Destination Fare Min/Max stay
* Exclusive discounts off for select Cathay Paciﬁc Europe* From KRW 2,502,000 3day / 1 month
Welcome to Cathay Paciﬁc’s Small Business Solu- Holidays Limited Stay-A-While package Australia* From KRW 2,056,000 3day / 1 month
tions. Any company which enrolls during promo- * Easy access to book and manage travel through * Europe: London,Rome,Paris,Frankfurt,Amsterdam
tion period will get additional beneﬁts as follows.. on-line * Australia: Sydney,Melbourne,Perth,Brisbane,Adleide,Cairns
Promotion period: 1 Sep. ~ 31 Dec. 2009 If your company meets above conditions,
Please join and enjoy exclusive beneﬁts and con-
Additional beneﬁts venience of online travel management. * This fare is exclusive of taxes, fuel surcharges.
* Lowered the entrance level: Any SMEs that For more details, please visit www.cathaypacific. * Terms and conditions apply
spend a minimum of KRW 7,000,000 on air travel com/kr
to Hong Kong and beyond with minimum 3 For more details and bookings, please contact
employees ﬂying annually can join this program Cathay Pacific Business Class Special Fares Sooyeoon Kim, Direct Sales Team at 02-311-
called “Small Business Solution”. to Europe & Australia 2755 or email to sel#cpa@cathaypaciﬁc.com
* Launching Special Promotion fares for Business
Class & Economy Class fares to Hong Kong and For your successful business, Cathay Paciﬁc offers
Taipei on Cathay Paciﬁc Airways and Dragonair. amazing Business Class Fares to Europe & Austral- Website: www.cathaypaciﬁc.com/kr
Book & Check-in Online, and
Print out Boarding Pass at
Now even possible online
cancellation of Lufthansa Lufthansa
Home ﬂight booking!
Spend less time at the airport and spend more If you should have to cancel a Lufthansa ﬂight, it is
time at home. Now the online check-in and online now possible to do this online as well. Since 16th
boarding pass are available on Seoul-Frankfurt / September, 2009 the new online refunds function
Munich routes. enables you to cancel ﬂight bookings quickly and
easily up to one day prior to the start of your jour-
The process is very simple: ney.
Step 1: Check-in online at lufthansa.com with
E-ticket sent to registered email address. With one-stop online service save your time for
Step 2: Select your seat your loved ones!
Step 3: Print out your online boarding pass
Step 4: Visit Lufthansa baggage drop-off counter
J25 at Incheon airport. lufthansa.com
click, book and ﬂy
Either travelling with or without checked baggage,
you must visit the baggage drop-off counter to Reservation:
get the validation stamp from Lufthansa as per Seoul (02) 3420-0400
required by the airport authority. Busan (051) 469-2438
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Email: jean-marie.hurtiger Fax: 393-6196 Fax: 774-6458 Chairman : Mr. Casper ‘THooft FOOD & BEVERAGES COMMITTEE IT-TELECOM COMMITTEE Chairman: Mr. Franck Lapeyre
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Tel: 3703-5003 Tel: 6001-3865 Tel: 011-380-5744 Tel: 6424-1007
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