Sustainability Report 2014 KYOBO Life 2

CEO's Message

Greetings Respected Stakeholders!

Greetings Respected Stakeholders!

On behalf of Kyobo Life, I would like to deliver our sincere appreciation for your constant support for and interest in Kyobo Life.

In the midst of a long global economic recession, along with many other countries distressed and struggling to recover, economic conditions in Korea in 2014 continued to be challenging due to slow economic growth, decelerating interest rates, and low consumer prices.

Despite such a challenging environment, over the year 2014, Kyobo Life took firm actions in relation to achieving our Vision 2015, ‘To be the com- pany that provides optimum insurance coverage and on-going services’. In particular, we put the upmost effort into accomplishing the two corner- stones of our core management target; namely, ‘expansion of optimum insurance coverage to customers’ and ‘advancement of profit structure’, along with practicing sustainability management that pursues shared growth with all stakeholders.

As we took firm action and made significant progress in these cornerstones, we were honored to receive the 2nd annual ‘Most Beloved Company Presidential Award’ in recognition of our efforts to promote sustainable management based on economic reliability, environmental soundness, and social responsibility. Therefore it is no co-incidence that Kyobo Life has maintained the top ranking in the Sustainability Index in the life insurance sector for five consecutive years. Overview 2 3

We believe that all humans are born to be respected and to be (RBC). We have strengthened our risk management system to valued by others. That is why we put respecting each person's actively tackle increasing household debts. We have also rein- values at the core of our mission and titled this fifth Sustainabil- forced our market responsiveness in the asset management ity Report, ‘Humanity and the Future’. We are pleased to detail sector, which led to an improvement of asset yields. We have our sustainability activities and performance in our annual sus- earned an A+ rating from Fitch Ratings for two consecutive years tainability report, updating our progress to keep the pledges and maintained an A2 rating for seven consecutive years from that we held to our stakeholders. Moody's which also enhanced the rating outlook to ‘Positive’. We will become a company that grow together Our pledges to our Stakeholders and Performance in 2014 are as with the Government and Communities. follows: We will become a company that provides optimum Kyobo Life has proactively made a social contribution by imple- insurance coverage and on-going services. menting activities to help the less fortunate who are suffering from illnesses, financial hardships, and unequal access to edu- By operating ‘Product Concept Proposal Task Force Team’, cation. Over the years, we have recognized and analyzed vari- we launched various new products including an annuity that ous environmental impacts of the life insurance industry. As a acquired the exclusive rights for its use. The goal of this was to result, to minimize our direct and indirect impacts on the envi- provide differentiated products in a timely manner to our cus- ronment, we conducted a green remodeling project for our local tomers with an innovative approach. Over the year 2014, we also headquarters, which was reborn as a modern eco-friendly build- strengthened the quality of our service by further advancing the ing after renovation. In 2014, we continuously participated in ‘Lifelong Care Service’ that began in 2011. To embed customer socially responsible investment by broadening our SOC portfo- protection culture into all departments of the organization, we lio in sectors from renewable energy to waste management. have also enacted a new Customer Protection Charter. Our con- tinuous efforts in providing advanced customer protection ser- Kyobo Life recognizes the importance of Creating Shared Val- vice led to Kyobo Life receiving the highest rating in the assess- ues(CSV) which recently emerged as a new paradigm in creating ment by the Financial Supervisory Service. both economic and social values. By placing CSV as the core of our company-wide marketing strategy and thanks to some of We will become a company that succeed together the benefits of the related actions, we were awarded with the with our Financial Planners. Porter Prize for Excellence in CSV by the Institute of Industrial We are continuously supporting the development of insurance Policy Studies among the private corporations. This is a year in professionals, including financial planners and managers, by which we plan to expand our CSV activities in consideration of the strengthening our internal training system. Our training sys- uniqueness of the life insurance business by taking on the role of tem allows us to select Financial Planners that can deliver good social security, and following our founding philosophy; ‘promotion customer assurance service and put them on the fast track to of national education and formation of domestic capital’. develop early success in their careers. At the practical level, we support our financial planners with a real time information We would also like to take this opportunity to express our enduring access system that instantly supports and supplies them with support of the ten Principles of the UN Global Compact in the areas the knowledge needed for sales and service activities, particu- of human rights, labor, environment and anti-corruption. As a par- larly when talking to customers. ticipating member, we will continue to embrace, support and enact these ten fundamental principles within our sphere of business. We will become a company that grow together with our Employees. We anticipate that business conditions in 2015 will not be any easier than 2014. In the era of the so called ‘New Normal’, we will We have put the utmost effort into making Kyobo Life a top com- actively respond to and tackle a broad range of risks to deliver pany to work for, by creating a better working environment and shared growth to all stakeholders. providing a variety of growth opportunities for professional tal- ent. We have concentrated on continuously delivering insurance We would like to thank all our stakeholders- our customers, our marketing training to our employees, so that they can dissemi- financial planners, our employees, our investors, the govern- nate the proper understanding of the life insurance industry. We ment and communities- for their support. provide even more development opportunities for our employ- ees by rotating roles and expanding each employee's job scope. Thank you once again for your continued support. We will become a company that is attractive to Investors.

Despite the challenging environment due to slow economic March 2015 growth and long term low interest rate, Kyobo Life strengthened Chang-Jae Shin, CEO & Chairman our firm-wide action to secure a solid financial soundness ratio Kyobo Life Sustainability Report 2014 KYOBO Life 4

Sustainability at Kyobo

Pursuit of Common Growth with All Stakeholders

Pledges Main Initiatives of 2014

Innovative Work Spread Customer A company that Process Subs- Protection Centered 1 provides optimum cription Culture in the insurance coverage Customer Valued Industry and on-going Creative Product services. Development Excellent Organization Structure to Provide Expand Complete Good Customer Sign Up for Family Guarantee Life Insurance Products Payment Retention Company-Wide A company that Response to 2 succeed together Advanced Practice of Enhance RBC Ratio Lifelong Care Service with our Financial Enhance Market Planners. Responsiveness for Asset Management

A company that 3 grow together with our Employees. 10 Key Issues in 2014

Customers Employees Reinforce Fair Performance customer information Evaluation· protection Compensation Customers A company that Effort towards Eliminate 4 is attractive to Protection of Discrimination customer (sex, age, birth investors. location, school etc.) Clear explanation Financial and information on Planners Employees products and service Investors Fair distribution of Financial Planners created value

Communication Government Prevent and expose A company that between Kyobo Life Investors ·Commu- insurance fraud 5 grow together with and Financial Planners nities the government Inform better to Government & and communities. financial planners in the incident of delay Communities in new contract and Program for payment screening Raising Environ- process mental Awareness Overview 4 5

Pursuit of Common Growth with All Stakeholders

1) Principles KPI

01 We will listen to the customers and manage the company (13th Month)Policy holder Persistency Rate % from the customers’ perspective. 84.1 02 We will enhance service quality throughout the policy life Customer Satisfaction Level points cycle, from underwriting to persistency and to benefits 72.7 payment. Market Share Rate 11.4 %

03 We will pay respect to and trust the Financial Planners as our business partners. Level of Satisfaction 04 We will establish fair standard and help the Financial of Financial Planners 72.9 points Planners engage in their sales and service activities with (13th Month)Financial peace of mind. % Planner Settlement Ratio 39.9 05 We will support the Financial Planners to grow into the insurance experts.

06 We will continue on our corporate culture of joy, pride and trust. Level of Satisfaction by 07 We will provide equal opportunities and reward according Employees - to fair evaluations. Training hour per 08 We will support our staffs to grow and develop into the employee 77 hour insurance experts.

Total Asset trillion won 09 We will continue to produce exceptional profit 85.8 through the good growth. Return on Equity % (ROE) 7.8 10 We will increase the value of company through preemptive risk management. Financial Soundness Ratio (RBC) 271.3%

11 We will actively carry out corporate social responsibility Social Contribution % activities to grow together with our communities. (Amount) (12.1 billion2.3 won) 12 We will manage our business in a nature-friendly way, Weight of Social reflecting the nature of our business. % Responsible Investment 8.8 13 We will grow together with our partners through fair Energy Consumption TOE competition. 18,327

1)Please refer to the bottom of 16~17p  for the standard calculations. Sustainability Report 2014 KYOBO Life 6

Top 10 News of Kyobo Life's 2014

We share our Top 10 0 1 First Place in Sustainability Index 0 2 Retirement Pension Grand Award sustainability achievements for 5 consecutive years, for Best Service and Long Term of the year, selected out of Winner of the ‘Most Loved Company’ Profit Return the 15 topics within the broad Presidential Award spectrum of sustainability. The Last October, Kyobo Life continued to receive the Kyobo Life earned the First Korea Pension Grand 15 topics were narrowed down highest ranking in the life insurance sector for Korean Award hosted by the Money Today in May fol- to 10 by our employees and Sustainability Index, conducted by the Korean Stan- lowed by the First Korea Retirement Pension Grand financial planners through an dards Association, for five consecutive years. This Award from the Korea Economic Daily in November. electronic survey. outcome is meaningful, as it confirms that we are the The core competitive advantages that led to such This e-survey was participated leading practice for sustainable management in the achievement were our differentiated service and by 1,531 employees and 4,365 industry, pursuing shared growth with all stakehold- financial outcome such as 1:1 personalized consult- financial planners, a total of ers. On the same month, we also received the 2nd ing and highest long term profit return rate in the 5,896 stakeholders. The top 10 ‘Most Loved Company’ presidential award hosted by industry. At Kyobo Life, we provide comprehensive achievements in 2014 are as the Ministry of Trade, Industry and Energy in a similar management reports with indication of profit return follows. context underpinned by the systematic process for rates to each of our customers that signed up for DC incorporating various stakeholders' opinions, pur- type insurance, which are approximately 140,000 suing balanced development for all stakeholders, people. Over the past five years, Kyobo Life had the implementing corporate social responsibility activi- highest cumulative gross returns, among more than ties and other key sustainability efforts. 50 retirement pension providers.

0 3 Health, Greatness & Intelligence! 0 4 First Class Rating in FSS(Financial Sponsoring Athletics Competition Supervisory Service)'s Civil for Young Dreamers for 30 Years Complaint Occurrence Evaluation

As of this year, the Kyobo Life Cup Youth Athletics Kyobo Life earned the first class rating for the Civil Competition has met its 30th year. With our deep Complaint Occurrence Evaluation conducted by the rooted belief on education; health is a key require- Financial Supervisory Service. This has a profound ment for positive mind and good spirit, we have meaning because it is a reflection of continuous efforts been sponsoring the national athletics competition of our financial planners and employees and our com- for youngsters for 30 consecutive years since 1985. pany-wide intention to protect customer data under To celebrate the 30th anniversary of Athletics Com- the slogan of customer comes at the center of every petition for Young Dreamers, various events were part of our business. After receiving the third class rat- held over the year 2014. In June 2014 for the 30th ing in 2011, we reflected on ourselves and focused on Anniversary Homecoming event, we invited alum- recovering our reputation based on the trust that cus- nus who participated in this competition over the tomers have in our integrity. So, we paid the utmost last 30 years, who are now world sport stars and ath- attention to customer data privacy and security to pro- letes, such as Seung-Hee Park and Suk-Hee Shim. On gressively improve this rating. A major enhancement this day, we arranged various mini events like Men- in reducing uncompleted sales activities and expand- tor-Mentee Date, social contribution activities with ing the receivers of the ‘lifelong care service’ enabled FP supporting employees and FP, 30th Anniversary us to receive the second class rating in 2012 and fur- Photo Exhibitions and many others. thermore upgraded to first class in 2013. Overview 6 7

+ 0 5 ‘Smart Portfolio System’ to 0 6 The CEO Award Winner by the 0 7 A from Fitch Ratings for Two Analyze Guaranteed Financial Korean Academic Society of Consecutive Years, One of the Savings Business Administration World's Three Renowned Credit Rating Agencies

At Kyobo Life, we developed and opened the Following the Consumer Award by the Korean Followed by the A+ acquired from Fitch Rat- ‘smart portfolio system’ in October to provide Society of Consumer Studies in 2013, last ing last July, Kyobo Life maintained A+ this a smarter tool to analyze guaranteed financial August, we unprecedentedly earned the 29th year, which makes it two consecutive years. savings. This system allows customers to mea- Business Scholars Selected CEO Award by the Fitch Ratings evaluates overall Insurer Finan- sures the future guaranteed insurance payment Korean Academic Society of Business Adminis- cial Strength(IFS) which includes profitabil- by simply inputting their current living costs. tration in recognition for outstanding business ity, financial soundness and risk management This then helps customers find appropriate performance, social responsibility achieve- skills. We are the first to receive the A+ rating insurance products which will enable them to ments and for being at the forefront of spread- among the insurance companies in Korea. Fitch cover the lack of guaranteed money expected ing the customer-centricity culture in Korean Ratings quoted in its report that Kyobo Life has to receive in the future. This system can be used life insurance industry. This is a significant out- a strong market dominance and presence in the in FP.com, Kyobo Dream Planner and Kyobo come in the sense it stands for an outcome of Korean insurance industry, as well as performs Dream On and is available for Kyobo Life's flag- objective evaluation by the business adminis- stable profitability and financial soundness. ship products such as Multi Plan Kyobo Inte- tration scholars, going beyond the recognition grated CI Insurance. of simply being the best practice in the industry. We have been particularly recognized for lead- ing the industry in the areas of consumer cen- tered business practices.

0 8 Innovative Products to 0 9 Gwanghwamun Message 1 0 Increasing Customer leverage Customers Values Board Recreated with a touch of Emotional Satisfaction on University Student's Design idea ‘Nobiliaire Marketing’

Over the year, Kyobo Life has developed and Kyobo Life held a design competition for univer- We actively performed Nobiliaire Marketing offered innovative services in real time response sity students to change the design of the adver- to deliver our sincere gratitude and differ- to customers' needs and market trends. We tisement board in Gwanghwamun for the first entiated service to our customers. Starting introduced various new products starting from time. Our intention lied on creating a stage to with the Nobiliaire Hue concert in Daejun and Kyobo LTC Life Insurance in January 2014, fol- communicate with the young and raising inter- Gwangju in August last year, we held 2014 Asia lowed by Kyobo Senior Pension Plan Insur- ests towards the Kyobo Life's message board. Philharmonic Orchestra Concert in Septem- ance, Multiplan Kyobo Variable Universal Life The student's design that won the competition ber in Seoul Arts Center, which the orchestra Insurance and others. In particular, Look Ahead was presented in fall design. The design repre- was led by Maestro Myung-Whun Chung. We Kyobo Variable was an innovative product that sented the classical virtues of modesty in nature invited 5700 VIP customers and the president enhanced existing pension insurance products through the imagery of falling leaves. This com- of Kyobo Life, Chang-Jae Shin joined the con- by creating new dimensions of relative policy. petition received 218 design submissions and cert to meet with the attended VIP customers. One month after the launch of this product, these were reviewed and assessed for three In October, Kyobo Nobiliaire Class was offered more than 13,000 people signed up. weeks in July. The final award was selected for for VIP customers and their children who have its high quality, expressiveness and novelty. dream to be musicians. Sustainability Report 2014 KYOBO Life 8

Company Information

Overview As an insurer and investor, our ultimate goal(vision) is to help every single person to successfully manage their financial future by carrying out our responsibility to never put one in despair due to various financial hardships in life. Since our establishment in 1950 and since our firm declaration to ‘pursue innovation’ in 2000, we have been keeping our promise for 50 years, to be at the forefront of creating a sustainable life insurance market through proactive change and innovation. At the heart of our values are our vision that motivates us to be the life insurance firm that ‘provides optimum insurance coverage and on-going services(Cus- tomer Assurance No. 1)’, deliver ‘emotional stableness’ and ‘financial guarantee’ beyond our customers' expectations.

Organization The Kyobo Life provides services centered on the headquarters that is made up of 4 departments, 3 divisions, 45 teams, 5 cen- ters. The sophisticated international branch network covering New York, Tokyo, and Beijing, allows us to offer our services to wider customers around the world. Kyobo Life also has a life asset-management firm as a local corporate body in the US.

Key Business Figures

Company Name Kyobo Life Insurance Co. Ltd CEO Chang-Jae Shin

Establishment Date August 07, 1958 Number of 1) 2) Personnel Equity Total Assets Premiums Headquarters 01, Jong-ro, Jongro-gu, Financial Planners Location Seoul, Korea 4,269 19,536 7.0 Trillion Won 85.8 Trillion Won 12.3 Trillion Won 1), 2)Figures based on IFRS financial statement according to the International Accounting Standards

Organization Chart CEO

Chief Operating Officer

Chief Distribution Officer Chief Marketing Officer Chief Investment Officer

Gangbuk FP Jungbu FP Nobiliaire Center Retirement Pension Product Investment Management Regional Division Regional Division DAWIN Service Division Development & Management Division Support Division Gangnam FP Daegu FP Center Support Division Credit & Loan Division Regional Division Regional Division Insurance Service Group Sales Division 1 Kyungin FP Honam FP Division Alternative Regional Division Regional Division Group Sales Division 2 AM Division Investment Division Customer Busan FP Bancassurance Satisfaction Center Regional Division Division Group Client Support Direct Marketing Customer Care GFP Department Center Department Center

Operation Locations (Unit:place) Kyobo Life has 605 branch offices and 65 customer Plazas in South Korea.

Category Seoul Incheon Gyunggi Gwangwon Busan Gyungnam Daegu Ulsan Branch Office 168 29 116 19 41 40 25 17 Customer PLAZA 15 4 12 2 5 4 3 2

Category Gyungbuk Daejeon Chungnam Chungbuk Gwangju Jeonnam Jeonbuk Jeju Branch Office 36 14 17 17 16 20 21 9 Customer PLAZA 4 2 1 2 2 3 3 1 Overview 8 9

Primary Products History Kyobo Life offers diverse financial products for private customers and Kyobo Life has long been at the forefront of writing the corporate entities, in terms of insurance, loans, funds, and trust. Par- history of life insurance in Korea with our 56 years of ticularly, we focus on offering ‘family life guarantee’ and ‘elder life knowhow and understanding and with our firm belief guarantee’ life insurance products, to support customers to manage that ‘education is the future of a nation’. their foreseeable future risks sensibly.

· Wins the second ‘Beloved Corporate Government’ This product supports the 2014 Integrated CI Insurance Presidential Award entire family with a single contract, and a CI(Critical Illness) · Selected as the top ‘Korea KSI’ in the Life Insurance insurance policy consists of paying a portion of the benefits Sector for five consecutive years when a critical illness occurs and providing the rest of the · Wins the first private corporation Prize for benefits upon the death of the insured customer. This Excellence in CSV in the process sector combines the strengths of both health insurance and life · Received ‘A2’ from Moody's for seven consecutive insurance. years · Certified as ‘A+’ for Credit Rating from Fitch Ratings Whole life - Term Insurance This product provides the for two consecutive years beneficiary with benefits when the insured person die. There 2012 CEO Chang-Jae Shin wins the 2012 Grand Prize Asia are diverse forms, such as universal lifetime insurance which Insurance ‘This year’s best insurance CEO' prize allows the customer to change premiums or opt for advance payments, and periodic insurance type which a certain 2011 Proclamation of ‘Kyobo VISION2015’ period is insured. 2010 International agreement for social responsibility of an industry and became the member of UN Global Pension · Deposit Insurance This deposit insurance Compact helps customers to accumulate assets and to attain social 2009 Selected as ‘2009’s Best Insurance Company' in the security after retirement. The customer can choose from 2009 Asia Life Insurance Industry whether they wish to receive the payment at a certain period or to receive pension fund until death. This product is 2004 Wins ‘Customer Satisfaction Grand Prize (For five consecutive years)’ and dedicated the ‘Hall of Fame’ suitable for customers to accumulate their assets or to create a target amount of funds. 2002 Foundation of ‘Kyobo Dasomi Volunteer Service Center’ This product helps Education· Child Insurance 2001 Proclamation of ‘Kyobo VISION2010’ and ‘CI’ customers to prepare funds for their children's academic propose. Depending on the children's age, customers can 2000 Proclamation of change innovation and receive academic funds annually. In addition, customers can establishment of ‘Kyobo's ethics charter.’ choose an extra special contract that covers fund in the event 1997 Establishment of ‘Kyobo Life Education and Culture of the child suffering from disabilities, diseases or accidents, Foundation’ which is the strength of this product. 1996 Founder Yong-Ho Shin Inducted into the IIS ‘Insurance Hall of Fame’ Health · Accident Insurance This includes health insu- rances that provides compensation should there be any 1994 Company renamed as ‘Kyobo Life’ diagnosis or surgery regarding a disease, long-term recu- 1992 Establishment of ‘Daesan Culture Foundation’ peration insurance that provides for daily disabilities or dementia, and actual medical insurance that pay benefits 1991 Establishment of ‘Daesan Rural Culture Foundation’ concerning direct medical costs, and others. 1983 Founder Yong-Ho Shin Wins ‘World Insurance Grand Prize’ from International Insurance Society (IIS) Retirement Pension Insurance This product is Establishment of ‘Kyobo Book Centre Co., Ltd.’ provided based on the law for the guarantee of retirement 1980 payment for laborers, covering retirement pension 1964 The First Savings Day Excellence in Saving Awards management and asset management services. ‘Presidential Honors’

1958 Establishment of ‘Korean Education Insurance Co. *Please refer to Kyobo Life's webpage (www.kyobo.co.kr) Ltd’, World's First Education Insurance, ‘Jinhak for more details of each products. Insurance’ Sustainability Report 2014 KYOBO Life 10

Life Insurance Business Process

Our core business process comprises of three stages: Subscription, retention, and payment. In the sign up stage, we construct and recom- mend the best plan for each of our customers according to their needs and financial abilities. The retention stage aims to help increase the awareness of insurance products and benefits it bring to the customers. This stage deals with all handling of the related matters. In the pay- ment stage, in the event of calling for payment, we deliver the promised benefits in accordance to the contract, to help customers overcome any hardships they faced. The premiums paid by customers are safely managed by us with a long term investment strategy to secure sound and stable long-term returns.

Kyobo Life successfully signed 917 thousand new contracts, provided retention service to : 4,463 thousand people and paid 7,300 billion won for 2,657 thousand cases as of FY2014.

New Initial Subscription Premiums Retention Thousand917 Cases 1,727.5Billion Won

Customers

Thousand4,463 People Subscription In-force Premiums

10,571.9Billion Won

Payment Claims Paid

Thousand2,657 Cases 7,284.7Billion Won Payment

Asset Management

Loans 15.7Trillion Won Real Estate 12.0 Trillion Won Security 42.1 Trillion Won Overview 10 11

Kyobo Vision

The vision of Kyobo is comprised of our core purpose, core value and visible future. The core purpose is what we must consistently pur- sue as long as Kyobo Life exists, and our core values are the principal standards for decision-making and actions of all employees. The ‘Vision2015’ is our clear objective that all of our employees must focus on to offer their skills and time to achieve Kyobo Life's ultimate goal to be the best at providing optimum insurance coverage and on-going services in Korea by 2015.

Kyobo Vision2015

The Company that Provides Optimum Insurance Coverage and On-Going Services (No. 1 Provider in Insurance Coverage and On-Going Services)

Core Purpose

Our mission is to help people not to despair with hardships in their lives

Core Value

Customer Honesty and Challenge and Centricity Sincerity Creativity

We give top priority We are fully accountable We strive to accomplish to our customers and always endeavor challenging goals with to serve our customers a sense of creativity to in an honest and develop both the company sincere manner and ourselves

Visible Future (Vision2015) Our Vision is to become a company that provides optimum insurance coverage and on-going services by 2015

This implies providing ‘Peace of Mind’ and ‘Financial Protection’ beyond customers' expectations so that ‘we help people not to despair with hardships in their lives’. To achieve this, Kyobo Life will put customers' benefit at first, work hard and be honest, and challenge our- selves to think out of the box according to our core values.

In 2014, Kyobo Life established a strong foundation to step forward towards accomplishing our Vision 2015 by focusing on ‘Expansion of Insurance Coverage to Customers’ and ‘Advancement of Profit Structure’. Sustainability Report 2014 KYOBO Life 12

Corporate Governance

Ownership Kyobo Life maintains transparent and clear ownership status for a substantial management system. The largest share- holder is the CEO Chang-Jae Shin with 33.78% of the share, while Corsair Capital(9.79%) and AXA(2.24%) are sharehold- ers through recapitalization and share sales in 2007. In 2012, OTTP(Ontario Teacher's Pension Plan, 9.93%), Corsair Capi- tal(9.79%), Affinity(9.05%), and few others became our new shareholders.

Shareholder Composition(Unit:%)

Mr Chang-Jae Shin Mr In-Jae Shin and Two Others AXA 33.78 5.65 2.24 OTPP Standard Chartered PE Goldman Sachs 9.93 5.33 1.07 Corsair Capital IMM Employee Stoke Ownership 9.79 5.23 Association Affinity Baring PE 1.02 9.05 5.23 Meiji Yasuda Life Export-Import GIC 1.00 Bank of Korea 4.50 Others 5.85 0.33

Corporate Governance Status Kyobo Life's main decision making bodies are the General Meeting of Stockholders and the Board of Directors. The external directors are actively involved in observing management activities. We are further improving our corporate value by placing a compliance officer and independent audit committee to perform thorough internal regulations.

Corporate Governance Chart General Shareholders' Meeting

Board of Director

Outside Director Audit Committee Risk Management Management Compensation Committee Committee Committee Recommendation Committee

Board of Directors The Board of Directors are the final decision making body on issues designated in the legislation and articles, issues dele- gated by the General Meeting of Shareholders and those related to the company's basic policies and business operations. The body also supervises the directors' execution of their tasks.

Board of Directors Composition The Board of Directors consists of two executive directs and four outside directors; there are no female directors as of now. Each director is selected through the General Meeting of Shareholders by evaluating their qualifications signified in the related standards provided by insurance and other industry regulations. Outside direc- tors in particular, are selected through a fair and strict screening process by the Outside Director Recommendation Com- mittee regarding their expertise and stake holding status. The outside directors should not own any stake of the company as this allows increasing of the transparency of the management. Overview 12 13

Board of Directors Composition

Category Name Position Expertise

Inside Chang-Jae Shin (Born 1953) CEO and Chairman of the Board of Directors - Directors Seokki Lee (Born 1965) CFO - Pil Wha Yoo (Born 1954) Dean of the Graduate School of Business, SungKyunKwan University Marketing Planning, Business Hyong Chul Kim (Born 1953) Former CEO and Vice President of Jeil Fire & Marine Insurance Outside Management Directors Young Taeg Park (Born 1959) Affinity Equity Partners, Managing Partner Finance, Accounting Hari R. Rajan (Born 1977) Managing Director and Partner of Corsair Capital Finance

Operation of the Board of Directors Kyobo Life Board of Directors operates a regular board of directors meeting once every month but also runs temporary Board of Directors meeting when it is requested by the Chairman and Board of Direc- tors . In the fiscal year of 2014, Kyobo Life held 7 BOD meetings. We disclose information about the participation of Board members for each committee, opinions of external directors on each agenda, and voting results, on our website every month(www.kyobo.co.kr>Notice>Corporate Governance).

Performance Evaluation and Compensation The directors' compensation is based on the evaluation of directors' accomplishment to the annual goals reported to the Board of Directors at the end of each fiscal year. The executives' salaries are decided in the General Meeting of Shareholders, and the compensation for external directors are disclosed on our website(www.kyobo.co.kr > Notice > Corporate Governance).

Affiliates Kyobo Life has 11 affiliates related to life insurance business, which each of them play a key role in enhancing Kyobo's brand and corporate value by pursuing synergy effects through active interaction between businesses.

Affiliate Ownership

Ownership(%) Ownership(%)

Kyobo Securities Kyobo Book Centre Financial Investment 51.63 Retail in Books and Magazines 100.00

Kyobo AXA Investment Kyobo Realco Managers 50.00 Management of Commercial 100.00 Asset Management Real Estate

KCA Claim Adjustment Kyobo Information &Communication Other insurance and pension 100.00 Computer System Integration 89.83 related services Consultation and Creation

Saengbo Real Estate Trust Non- 50.00 Kyobo Data Center 99.99 Real Estate Trust Financial Financial Leasing of Commercial Real Estate

A&D Credit Information Credit Check & Debt Collection 19.50

Kyobo Life Asset Management (US local corporate body) 100.00 Marketable Securities Investment

Kyobo Life Planet Life Insurance 88.34 Sustainability Report 2014 KYOBO Life 14

Sustainability Management

Sustainability Management Framework As a sustainable insurer, sustainability management is at the core of our ‘Vision 2015’. Our sustainability philosophy cen- ters on striving for shared growth with all stakeholders and fulfilling our role to provide ‘optimum insurance coverage and on-going services’. For Kyobo Life, different types of stakeholders are categorized and defined. These stakeholder groups are those that have tight connection to our business. We developed pledges for each stakeholder group and these pledges are our core sustainability management strategy. At Kyobo Life, we have our own sustainability management system which has built around these pledges, principles to implement these pledges and KPIs to evaluate implementation and outcomes.

Sustainability Management Framework

Sustainability Management Pursuit of Common Growth with All Stakeholders Philosophy

Vision2015 The Company that Provide Optimum Insurance Coverage and On-going Services (the No.1 in Insurance Coverage to customers)

Pledges for A company that A company that A company that grow A company A company that Stakeholders provide optimum succeed together with together with our that is attractive grow together with insurance coverage our Financial Planners Employees to Investors the Government and on-going services · Communities

Principles for Stakeholders 1. We will listen to the 3. We will pay respect to 6. We will continue on 9. We will continue to 11. We will actively carry customers and manage and trust the Financial our corporate culture of produce exceptional out corporate social the company from the Planners as our joy, pride and trust. profit through the responsibility activities customers' perspective. business partners. good growth. to grow together with our communities.

2. We will enhance service 4. We will establish fair 7. We will provide equal 10. We will increase the 12. We will manage quality throughout the standard and help the opportunities and value of company our business in a policy life cycle, Financial Planners reward according to through preemptive nature-friendly way, from underwriting engage in their sales fair evaluations. risk management. reflecting the nature to persistency and to and service activities of our business. benefits payment. with peace of mind.

5. We will support the 8. We will support our 13. We will grow Financial Planners to employees to grow together with our grow into the insurance and develope into the partners through fair experts. insurance experts. competition.

KPI for ·(13th Month) ·Level of satisfaction by ·Level of satisfaction by ·Total assets ·Social contribution Stakeholders Policyholder Financial Planners employees ·Return on Equity (ROE) ratio·amount persistency rate ·(13th month) Financial ·Training hours per ·Financial Soundness ·Weight of Social ·Customer Satisfaction Planner Settlement employee Ratio (Risk Base Capital Responsible Level Ratio Ratio) Investment(SRI) ·Market Share Rate ·Energy Consumption Overview 14 15

Sustainability Management Council Kyobo Life operates a sustainability management council to support the top management efforts to pursue sustainability management and to foster active communication on the related issues. The council discusses key sustainability manage- ment issues with the CEO and supports to lead to agreements and conclusion by the Chairman. Issues that are brought to discussions here are addressed in ‘Sustainability Management’ working-level meetings, which enables gathering of opin- ions of the heads of each department. This then maximizes the operation efficiency of the ‘Sustainability Management’ Council.

Operation Status of the ‘Sustainability Management’ Council

The 6th (Apr. 25, 2011) Final Report of Sustainability Management Project The 17th (Jun. 7, 2013) Status Report of Sustainability The 8th (Aug. 1, 2011) Management Long-term KPIs Results of collected opinions from stakeholders The 18th (Dec. 20, 2013) Report of Major Issues Regarding The 10th (Nov. 3, 2011) Sustainability Management Analysis of Current Status of Sustainability Management KPI

2011 2012 2013 2014

The 13th (Apr. 17, 2012) Shareholder’s Meeting Outcome The 19th (Mar. 5, 2014) Report of long term KPIs The 14th (Jun. 15, 2012) Adoption of social responsible performance of FY2013 investment (SRI) concept, Sustainability Management Simulation of public interests The 20th (Apr. 10, 2014) donations Change of pledges· principles of Financial The 15th (Jun. 15, 2012) Report to the Stakeholders on Planners FY2012 1Q Sustainability Report 2014 KYOBO Life 16

Sustainability Management Execution Performance

Kyobo Life established 13 principles centering on the five groups of stakeholders under the vision of becoming ‘the company that provides optimum insurance coverage and on-going service’. For consistent evaluation and operation of the sustainability manage- ment system, we annually report our status in accordance to the key sustainability issues of each stakeholder groups and KPIs.

Stakeholders Customers Financial Planners

Pledges A company that provide optimum A company that succeed insurance coverage and on-going services together with our Financial Planners 1_ We will listen to the customers and manage 3_We will pay respect to and trust the Financial Principles the company from the customers' perspective Planners as business partners 2_ We will enhance service quality throughout 4_We will establish fair standards and help the the policy life cycle, from underwriting to Financial Planners engage in their Sales and persistency and to benefits payment Service activities with peace of mind 5_We will support the Financial Planners to grow into the insurance experts

(13th Month) Level of satisfaction by KPI 1) Policyholder Persistency Rate (Unit:%) Financial Planners (Unit:Point) 2012 84.6 2012 69.6 2013 84.1 2013 72.2 2014 84.1 2014 72.9

Customer Satisfaction Level (13th month) Financial Planner 3) (Unit:Point) Settlement Ratio (Unit:%) 2012 75.9 2012 39.2 2013 72.4 2013 41.1 2014 72.7 2014 39.9

2) Market Share Rate (Unit:%) 2012 11.1 2013 11.3 2014 11.4

- - - Reinforce customer information protection - Communication between Kyobo Life and Key Issues - financial planners - Effort towards protection of customer - - - Inform better to financial planners in the - Clear explanation and information on incident of delay in new contract and products and service payment screening process

- - - Charter enacted to protect customers - Operating 2014 Awards of insurance coverage to Key Activities in FY2014 - customers - Improve the Financial Supervisory Service - Complaints ratings - Listen to various financial planner opinions - - - Enhanced digital communication with customers - Offer study aboard programs for excellently - performing financial planners' children - Rapport programs - - - Operate Da-moa system to support sales and - Provide accurate insurance information service activities Strengthen customer identification when writing - contract - Run MDRT(Million Dollar Round Table) member day - - Clearer guide to customers·financial planners on screening status of insurance sign up and payment

1) Policyholder Persistency Rate = (Contract maintenance fee/Underwriting fee)×100 2) Market share rate is based on Premium Income as of November 2014. 3) Financial Planner Retention Rate = (Number of advanced Financial Planners/Newly Registered Number of Financial Planners)×100, :Financial Planners Settled in the 13th Month includes those signed more than one more new contract and retained more than 10 contracts signed as of the 13th month Overview 16 17

Kyobo Life’s sustainability management aims to be the leading sustainability practice amongst the financial corporations in Korea by proactively communicating and sharing related information with the stakeholders.

Employees Investors Government·Communities

A company that grow together A company that is attractive to A company that grow together with with our Employees Investors the Government·Communities 6_We will continue on our corporate culture of 9_We will continue to produce exceptional 11_We will actively carry out corporate social joy, pride and trust profit through the good growth responsibility activities to grow together 7_We will provide equal opportunities and 10_We will increase the value of company with our communities reward according to fair evaluations through preemptive risk management 12_We will manage our business in a nature-friendly 8_We will support our employees to grow and way, reflecting the nature of our business develope into the insurance experts 13_We will grow together with our partners through fair competition

4) 8) Level of Satisfaction by Employees Total Assets Social Contribution Ratio·Amount (Unit:Point) (Unit:Trillion won) (Unit:billion won) 2012 64.9 2012 75.1 2012 3.1% 18.4 2013 63.7 2013 78.6 2013 3.2% 12.5 2014 - 2014 85.8 2014 2.3% 12.1

5) Training hours per Employee Return on Equity (ROE) Weight of Socially Responsible 9) (Unit:hour) (Unit:%) Investment(SRI) (Unit:%) 2012 110 2012 10.3 2012 8.1 2013 75 2013 8.5 2013 8.6 2014 77 2014 7.8 2014 8.8

6) 10) Financial Soundness Ratio (RBC) Energy Consumption (Unit:%) (Unit:TOE) 2012 258.3 2012 20,013 2013 292.2 2013 19,554 7)

2014 271.3 2014 18,327

- - Fair performance evaluation·compensation - - - - Fair distribution of created value - Program for raising - Eliminate discrimination - - Prevent and expose insurance fraud Environmental awareness (sex, age, birth location, school etc.)

- - - - Launch on-site management workshops and - Strengthen competitiveness with differentiated - Run adversity programs to overcome management status seminars retirement pension health·financial and knowledge difficulties - - - - Offer various welfare schemes - Optimal asset management, establishment and - 30th anniversary of Kyobo Life Athletics - operation of risk management system Competition for Young Dreamers - Build cooperate labor-management culture for - - win-win growth - Build scenario for all crisis that can happen for - Social contribution activities for environmental - different types of risks awareness - Run a performance management system for high - - performance and cultural policy - Fair allocation to create value - Social contributions through public foundations - - - Prohibits discrimination at workplace - Strengthen prevention of financial accidents and - insurance fraud - Job centered HR system

4), 5)Figures based on IFRS financial statement according to the International Accounting Standards 6)Risk Based Capital(RBC) = Available Capital for Insurance Payment (Payment Capacity)/Capital Required for Risk Management (RBC Total Risk)×100 7)2014 Risk Based Capital(RBC) figure decreased due to stricter calculation standard 8)Social contribution ratio:Social Contribution Expense/Net income 9)Social Responsible Investment(SRI) Ratio:(Amount of SRI/Total Asset)×100 10)TOE(Tonnage of Oil Equivalent):Energy produced through the combustion of 1 ton of oil Sustainability Report 2014 KYOBO Life 18

Special Page

Kyobo Life's CSV (Creating Shared Value)

Creating Shared Value (CSV) Creating Shared Value is a term for a new management practice which goes beyond the traditional notion of Corporate Social Responsibility(CSR), social contribution activities and sustainability. This term describes the new way to achieve both social and economic values and success by solving social problems in responding to the needs of the society. CSV has now become the core to our purpose.

Social Value Business Value

Job creation for financial Marketing effects, planners, unclaimed customer satisfaction, insurance payment rise of retention rate, information and deposit, and others deliver service knowhow and other Creating Shared Value

Shared Value

Creating Shared Growth of Kyobo Life

Kyobo Life's CSV_ Lifelong Care Service

Kyobo Life's CSV efforts ensure that our business practices and policies create a win-win ecosystem with our customers. We strive to meet the expectation of our customers through customer centered management and to actively responding to the market changes in the markets we serve. Since 2011, Kyobo Life has introduced the ‘Lifelong Care Service’ based on the philosophy, ‘offering valued service for existing customers comes before new con- tract making’. This service ensures all financial planners to visit retained customers on a regular basis to explain thoroughly on the insurance benefits described in the contract, making sure all customers fully utilize benefits and receive payments for accidents and ill- nesses. We have systemized this service from signing up stage to payment stage to deal with claims and complaints from all customers. This service is a way to uphold the prom- ises made to customers, and represents our efforts to restore customers' trust towards insurance firms and to create a customer centered guarantee service. The Lifelong Care Service has now become a leading practice for many insurers. Past three years of experi- ence offering this service, enabled us to enhance the service competitiveness and our exe- cution capacity. This service is a good example of CSV practices in the insurance sector, which creates both economic and social values. Emphasizing the very nature of our busi- ness as insurers, this service enables customers to receive the maximum benefits and cov- erages from their life insurance, while creating more financial planner jobs. Overview 18 19

As our experience and knowledge accumulate, we are sharing our real life knowhow on cus- Kyobo Life's CSV_ tomer care with the government, public organization, companies and health care agencies, DAWin Service where customer satisfaction is the key to success. Receiving ‘Customer Satisfaction Man- agement Award’ for five consecutive years, being the first in the financial industry to achieve this, we have continuously increased our reputation in this area and been providing CS con- sulting and training since 2005. We called this service, DAWIN Service, meaning let us win together in Korean. Over the year 2014, we have provided a range of customized CS services to meet the needs of our clients including CS quality enhancement and organization revital- ization programs. The DAWIN service is one of our key CSV practices, creating social and eco- nomic values based on win-win partnerships. This service enabled us to discover potential B2B market while supporting the success of our business clients through systematic train- ing sessions, in-house expert training program and CS advisory services.

Kyobo Life's CSV_Dasomi Foundation

Kyobo Life is actively engaged in differentiated social contribution activities in line with the very nature of the business. We put our focus on helping people to overcome life time challenges due to lack of health, money and knowledge. To do this, we have cre- ated a sustainable social contribution model through a partnership with an NGO with extensive experience and capacity. Our effort allowed us to demonstrate a new way of implementing social contribution going beyond the traditional social contribution practices. The Dasomi foundation is a good demonstration of this. Dasomi Foundation became the first certified social enterprise in Korea for applying a practical CSV model. The foundation provides free nursing service for low income patients and provides jobs to the vulnerable female head households. The foundation can be seen as a representa- tive job creation program to help the vulnerable earn financial independence.

Started as ‘Kyobo Dasomi Nursing Service Team’ in 2003, in October 2007 the service was recreated in the form of Dasomi Foundation which followed by getting certified as the first social enterprise in Korea a month after, in November. As of 2014, 400 caregivers are working for the foundation. The foundation can be viewed as a CSV best practice, which enhances the quality of lives of matriarch as well as offering social benefits to low income patients. The foundation creates jobs for matriarch with career discontinuity and provides nursing services to low-income patients. To make the foundation more self-reliant social enterprise, we are providing paid nursing service, training and con- sulting services to target ‘normal’ patients.

In recognition of our CSV activities including the ones above, Kyobo Life became the winner in the Porter Prize for Excellence in CSV organized by the Institute for Industrial Policy Studies and sponsored by Dong-A Newspaper in December 2014. This award sig- nifies our breakthrough from implementing mere short-term social contribution proj- ects. As part of our firm-wide commitment to practice CSV, this service represents our approach to offer greater social and economic impact with long term perspective, sin- cerity and objectivity. Sustainability Report 2014 KYOBO Life 20

Stakeholder Engagement

To pursue our sustainable management philosophy, ‘sharing growth with all stakeholders’ growing together with stakehold- ers, and put it into practice, firstly Kyobo Life gathered the opinions of our stakeholders through diverse communication channels such as survey, expert meeting, and regular meetings with customer panel, financial planners and employees.

Experts Meeting Kyobo Life carried out a systematic meeting with outside sustainability experts to seek and receive advice on ways to increase efficiency of sustainability management. Issues discussed in the meeting are reflected in this report. The issues that are not reflected in this report are to be referred as guidelines for planning sustainability management in the future.

Meeting Agenda: FY2013 Sustainability Report review and future direction on sustainability management Summary Date and Time : 2nd September 2014 (Tuesday) 14:00~16:00 Location : Kyobo Life Headquarter in Gwanghwamun 17th Floor Council Chamber Moderator : Se-Woo Jung Representative (THE CSR)

Highlight Kyobo's commitment Emphasis on Foundation's activities for change and achievements

Sustainability report should not merely include good There may be a need to emphasize and explain about the practices, but illustrate what lacked and what should be activities and achievements of the foundations including improved in the future. Overall content of the report is good the Daesan Agricultural Foundation. Also, there seems to but I hope that the report emphasizes the commitment be a need to improve customer satisfaction. Customer pro- to change for the better. In addition, the report should be tection is an important issue these days, thus, I hope the a way of self reflection, and hopefully include a clear CEO report highlights Kyobo Life's effort towards this issue. commitment statement on internalizing sustainability.

Security General Hong-Jae Im President Ja-Hye Kim Consumers Korea UN Global Compact Korea Network

Security General Hong-Jae Im President Ja-Hye Kim

Stakeholder Survey

Classification Method Subject Period Details Page

3,300 Life Insurance Policy Holders ㆍEvaluate satisfaction level compared to competitors Customer Sep~Oct. Aged Between 20~64 (Including 2,500 ㆍAnlayze Customers' Needs 29 Satisfaction 2014 Other Company’s Policy Holders) ㆍUnderstand activity conditions of financial planners Customers ㆍDiscover brand awareness and preference rate 1,012 Ordinary People Aug~Sep. ㆍDetermine the Needs for Insurance (Company) Brand - (Ages 20~64) 2014 ㆍ Evaluate the brand Images of Kyobo Life and its Financial Planners Overview 20 21

Need for sustainability KPIs Need to illustrate key characteristics of social contribution activities

After setting a target goal for Sustainability management, It is good to consider various stakeholders, but merely nar- innovation activities need to take place. The overall struc- rating social contribution performance seems to be not the ture of the sustainability report is good but there is a need best approach. There is a need to illustrate the key charac- for development of sustainability KPIs. Kyobo Life should teristics of various social contribution activities and show analyze why some sustainability KPI figures are low and Kyobo Life's clear social contribution concept, priority and find ways to improve on these issues. sorting.

Director Jong-Sun Park Korea Business Ethics Institute Executive Director Shin-Ae Hwang Korea Association of Fundraising Professionals

Think hard towards Kyobo Life's role A period where upgraded version of to create a better society Sustainability Vision is needed

I understand that Kyobo Life's philosophy to pursue win- Now is a good period to reflect back on the outcome and win development with all stakeholders but overly empha- activities of sustainability management in the past. Kyobo sizing ‘No 1 customer guarantee’ seems to be merely tar- Life should think hard on the ways to improve from the geting a particular group of stakeholders. There is a need past. I hope Kyobo Life finds the role the society requires. to think hard on how Kyobo Life can contribute in enhanc- As a company with good customer management service, ing the lives of our society and how Kyobo Life's activities more specific activities related to this could be introduced. can be value-orientated.

Chief Byung-Ok Ahn Institute for Climate Change Action Professor Hyung-Gu Moon Korea University

Director Jong-Sun Park Executive Director Shin-Ae Hwang Chief Byung-Ok Ahn Se-Woo Jung Representative

Classification Method Subject Period Details Page ㆍAnalyze Financial Planners’ Satisfaction Level

950 Financial Planners ㆍDiscover Comparative Advantages·Disadvantages Financial Aug~Oct. Satisfaction Working for Kyobo Life and Regarding Financial Planner Activities 16 Planners 2014 Other Companies ㆍ Determine Inconveniences and Needs of Financial

Planners Investors ㆍ Awareness towards Kyobo Life and the CEO, 180 Opinion Leader Oct~Nov. Government· Reputation Desirability, Reputation per attributes, Issues to - in Insurance Industry 2014 Communities Improve for better reputation Sustainability Report 2014 KYOBO Life 22

Materiality Test

Kyobo Life carried out a systematic materiality test based on the 2x2 matrix analysis; showing the ‘stakeholder relevance’ on one axis and ‘company relevance’ on the other axis. The key issues drawn from this evaluation are recognized as material importance for our business and stakeholders, and they form the main contents of this report.

Materiality Test Process

STEP 1 STEP 2 STEP 3 STEP 4

Collecting Issues Identifying Main Issues Analysis of Stakeholder Interests Selection of Key Issues Analysis of Company Interests

STEP 1 : Collecting Issues

At Kyobo Life, we analyze both internal and external evaluation outcomes to identify issues that Kyobo Life must consider while implement- ing sustainability management.

Identifying Issues through Various Analysis

Evaluation Method Number of Identified Issues Media web search using ‘Kyobo Life’ as keyword Media Analysis - 4,046 articles between January-June 2014 (2,047 valid articles) 49 - Grouping of issues that were handled at least 10 times Analysis of Main Issues in Sustainability Reports of five other financial companies Financial Business 50 Report Analysis - S Life, S Fire Insurance, D Fire Insurance, H Fire Insurance, D Banking - Grouping of 56 identified issues Indicator Analysis of Sustainability Management indexes such as GRI and ISO 26000 Related Index Analysis 78 - Grouping based on 2014 KSI (Korean Sustainability Index) issues (Impact 39, Trend 39) Issues raised from the Incorporate issues to be improved from the integrated 2013 16 integrated Survey results survey results Issues from the Previous Issues from the Previous Report 88 Report Total 281

STEP 2 : Identifying Main Issues

281 issues identified from the previous stage of evaluation process were grouped into 175 issues considering the interconnection between issues. To narrow down again, we once again interconnected the issues that are directly or indirectly related, and grouped into 88 issues. In this process, we executed an internal materiality test and reflected each issue in accordance with 13 principles of Kyobo Life's sustainability management.

Financial Government · 281 Stakeholders Customers Planners Employees Investors Communities Grouping Principles 1 2 3 4 5 3 4 5 6 7 8 9 10 Issues 19 29 9 9 9 15 8 8 13 13 9 21 13

175 Financial Government · Stakeholders Customers Planners Employees Investors Communities Materiality Test Principles 1 2 3 4 5 3 4 5 6 7 8 9 10 Issues 8 8 8 4 4 8 4 4 8 8 8 8 8 88 Overview 22 23

STEP 3-1 : Analysis of Stakeholder Interests

‘Stakeholder interests’ were evaluated based on the response frequency of the survey questions for each group of stakeholders. To increase the credibility of this analysis, we only asked questions regarding particular sustainability management principles that were highly relevant to each stakeholder groups.

Stakeholder Survey Investors, Category Customers Financial Planners Employees Government ·Communities Content Principles 1, 2, 11, 12, 13 Principles 3, 4, 5 Principles 6, 7, 8 Principles 9, 10, 11, 12, 13 Randomly Selected Randomly Selected Target Online Customer Panel Opinion Leaders from Financial Planners from Employees No. of People 500 2,000 1,000 200 Intranet for Financial Intranet Method E-mail E-mail Planners for Employees Period 2014. 9.17~22 2014. 9.11~12 2014. 9.23~10.8 2014. 9.23~29 Responses(response rate) 262 (52%) 549 (27%) 237 (24%) 34 (17%)

STEP 3-2 : Analysis of Company Interests

To find out the issues that the company is highly interested in, we surveyed executives and team managers to gather their opinions on the issues for each principle that they believe are most important for the company.

Survey to Executives·Team Managers

Number of Executives·Team Managers Method Period Response (rate) 73 Intranet for employees 2014. 11. 5 ~ 11. 12 28 (34%)

STEP 4 : Selection of Key Issues

Through the analysis of ‘shareholder interests’ and ‘company interests’, 10 out of the total 88 issues were selected as key issues. The details of each issue can be found in the respective pages in this report.

2014 2013 ㆍReinforce customer information protection 26p ㆍReceive and respond appropriately towards ㆍEffort towards Protection of customer 27-28p Customer Complaints Customers Customers ㆍClear explanation and information on ㆍReinforced Protection of Customer Information products and service 33p ㆍStrengthen Customer Assurance and Retention Service ㆍCommunication between Kyobo Life and 38p ㆍIncrease Financial Planners' Satisfaction Rate Financial Financial Planners for Product Competitivenes Financial Planners ㆍInform better to financial planners in 39p ㆍStrengthen Communication for Commission System Planners the incident of delay in new contract and ㆍImprove Corporate Culture Balancing between payment screening process Work and Life ㆍStrengthen Two-way Communication ㆍFair Performance Evaluation·Compensation 47p Employees ㆍExpansion of Labor Rights Employees ㆍEliminate Discrimination 48p ㆍFair Performance Evaluation·Compensation (sex, age, birth location, school etc.) ㆍWork focused human resource management ㆍFair distribution of created value 55p Investors ㆍImproving Asset Management Profitability ㆍPrevent and expose insurance fraud 59p Investors ㆍDeveloping new market Government· ㆍProgram for Raising Environmental 68p ㆍ Risk Management Communities Awareness ㆍPractice social contribution with ‘the spirit of love’ New Government· ㆍ Provide social goods and eco-friendly services Communities ㆍ Increase Trade Transparency *Details of the ten key issues of 2014 are illustrated by each stakeholder group's pledges and principles