Why Chung Ju-yung's grandson proposed a 'risk lab' for industrial zones

Jung Kyung-sun, chief sustainability officer and executive vice president of Hyundai Marine & Fire Insurance, delivers a keynote address at the 49th Korea Chamber of Commerce and Industry Jeju Forum, held at the Shilla Hotel Jeju on Saturday. [Korea Chamber of Commerce and Industry]

Insurers should act as a kind of lab — analyzing and presenting the climate risks and demographic shifts facing industrial hubs like Ulsan, Busan and Yeosu before anyone else does.

Jung Kyung-sun, chief sustainability officer and executive vice president of Hyundai Marine & Fire Insurance, made the remarks Saturday at the 49th Korea Chamber of Commerce and Industry Jeju Forum, held at the Shilla Hotel Jeju.

The proposal calls on the insurance industry to move beyond paying out claims after accidents and instead identify risks early, communicate them proactively and help design prevention strategies. It is also a call for insurance to underpin the sustainability of society as a whole — not just help individual companies fend for themselves — in the face of sweeping threats such as climate disasters and population decline.

His career, built on treating the resolution of social problems as core work, has led him to reframe the very role of the insurance industry.

Beyond payouts: insurers as front-line risk labs

Jung spoke at the forum's "Business Leaders" session on the theme of "Designing a Sustainable Future." He described South Korea's current situation as a "compound crisis" — one in which a shrinking population driven by a low birth rate and aging, surging electricity demand fueled by the spread of AI, increasingly severe climate disasters, and a trading order destabilized by tariff wars are all intertwined.

That crisis translates directly into costs. Jung projected that, based on 2023 figures, the working-age population would fall by about 9.4 million within 20 years, and that annual natural disaster recovery costs would reach 3.64 trillion won ($2.44 billion) by 2045. He also argued that if the financial structure of Korea Electric Power Corporation — which carries 73.5 trillion won in debt — were to change, the energy costs borne by industry would inevitably rise. He placed particular emphasis on the caregiving burden an aging society will create.

"No matter how advanced robots become, the hands-on care of helping someone get up and walk to the bathroom cannot be automated," he said. "Caregiving costs will surge."

Jung pointed to the power of preemptive investment. When Typhoon Hinnamnor struck in 2022, flooding forced Pohang Steel Mill to halt operations for the first time in history. When Typhoon Khanun arrived the following year, flood barriers erected in advance stopped the inundation. "Climate disaster damage will keep growing," he said, "but meaningful levels of investment can prevent it."

That is where insurers come in, he argued. Until now, insurers have waited for customers to apply for coverage, then calculated risk and set premiums. Jung proposed reversing that sequence: insurers should use the data they have accumulated to analyze climate risks and demographic changes in areas with concentrated industrial complexes, present those findings to companies and local governments, and connect the analysis through consulting all the way to insurance products — a model he called "total risk management."

He also explained why the structure of the insurance industry makes it well suited to this role. Because insurers manage ultra-long-term liabilities spanning decades, they can — unlike banks or securities firms — take a patient approach to returns and invest for the long term. Jung named care facilities, senior residential housing and regional balanced-development investment as target areas, and said, "The healthier and safer our 14 million customers are, the more money insurers make."

Overseas precedents already exist. Japan's major non-life insurance group Sompo has acquired a large number of care and nursing facilities, transforming itself into both an insurer and Japan's largest care-service provider. It has also invested alongside US AI company Palantir in technology for the efficient deployment of caregiving staff. In Japan, which experienced aging earlier than Korea, an insurer has moved from compensating for risk to managing it.

Jung also introduced Japan's green transformation strategy, in which the government and private sector are committing 1,500 trillion won, saying, "What we should learn from Japan is not any specific policy, but the consistent, long-term execution of policy."

From social enterprise to insurer: a third-generation heir's different path

Jung's ability to deliver this message is rooted in a career unlike most of his peers. He is the eldest son of Hyundai Marine & Fire Insurance Chairman Chung Mong-yoon and the grandson of the late Chung Ju-yung, founder of Hyundai Group. Rather than following a conventional management apprenticeship, he spent more than a decade building experience on the front lines of social innovation before joining the insurer — a rare path for a third-generation heir.

In his presentation Saturday, he introduced himself by saying he considers "solving social problems my main job." In 2012, Jung founded the nonprofit Root Impact and opened a co-working space for social ventures in Seongsu-dong, Seoul — a shared office called Heyground — creating an ecosystem where young entrepreneurs could gather and grow. Centered on Heyground, the number of social ventures in Seongdong-gu grew more than threefold, from 153 in 2016 to more than 560 in 2024.

Among the ventures that grew out of that community: a taxi service staffed by deaf drivers, and a logistics company that employs homeless workers and has grown into a business with sales of around 40 billion won.

After more than a decade in social innovation, Jung joined Hyundai Marine & Fire Insurance's management in late 2023 when the company created the industry's first CSO position. The essence of insurance — spreading risk across a community — met his own experience of using the power of community to solve social problems. Jung also called for giving young people a chance. "The people who will endure this compound crisis and solve its problems are ultimately those in their 20s and 30s," he said. "Even if the next generation looks lacking right now, we must boldly hand them authority and opportunity for real change to happen."

"Investing in sustainability first is not a story for good people — it is a story for rational ones," he added.

psj@heraldcorp.com
gil@heraldcorp.com