Boram Group, a mid-sized mutual aid company marking its 36th anniversary, stands at a turning point. As profitability in its legacy business, centered on funeral services, has slowed and a personal data leak has hit, improving the company's fundamentals has emerged as a task. With the founder's two sons stepping to the forefront of group management, second-generation leadership is also picking up speed.
Boram Group is currently led by founder and Chairman Choi Cheol-hong. The chairman's elder son, Executive Director Choi Yo-el, oversees the group's core business in the funeral institutional sector, while the younger son, Managing Director Choi Yo-han, is in charge of new businesses and strategy.
Boram Group grew out of Boram Sangjo Development, founded in 1991. Centered on seven mutual aid affiliates, including Boram Sangjo Development, Boram Sangjo Life, Boram Sangjo People, Boram Sangjo Leaders, and Boram Sangjo Plus, it secures a diverse customer base of general customers and corporations through face-to-face and telephone sales. As of last year, advance payments received from enrolled customers reached 1.6569 trillion won. Mutual aid companies receive advance payments from enrolled customers and prepare future funeral services.
◇ Profitability worsens, task is to regain customer trust
One of the tasks facing Boram Group is to regain customer trust. In May, the Personal Information Protection Commission imposed a penalty surcharge of 531 million won and fines of 11.4 million won in connection with the personal data leak at Boram Group affiliates including Boram Sangjo Development.
Earlier, in May 2024, a breach at Boram Group exposed the personal information of more than 7,000 people, including members and consultation applicants. The investigation found that Boram Sangjo Development recognized the leak but notified data subjects after the legal 72-hour deadline, and it also failed to destroy personal data past its retention period.
Because mutual aid services maintain long-term contracts with customers, trust is directly tied to business competitiveness. A personal data leak can weigh not only on the corporations' image but also on acquiring new customers.
Improving profitability is also a task. Last year, operating profit at Boram Sangjo Development, Boram Group's core mutual aid corporation, was 4.5 billion won, down 44% from the previous year. Other mutual aid affiliates also posted operating losses. Last year's operating losses were 9.1 billion won at Boram Sangjo Life, 5.2 billion won at Boram Sangjo People, 4.8 billion won at Boram Sangjo Anycall, and 200 million won at Boram Sangjo Siloam.
Analysts say that under the current structure centered on seven mutual aid corporations, work is needed to raise each entity's profitability and reduce duplicate expense.
Boram Group has put forward a shift from a mutual aid company to a "life curator" as its breakthrough. The strategy is to move away from a business structure focused on the specific life event of funerals and broaden its scope by connecting services needed across customers' entire lives.
Boram Group is expanding daily-life services such as travel and weddings, as well as education and healthcare, while also introducing Sky Pet, a mutual aid service dedicated to companion animals. In the funeral and memorial realm, it is expanding into post-funeral memorial services through the biostone brand ViaGem and Pets Via.
It is also widening its external reach in health management. Boram Bio, an affiliate specializing in research and development of natural-substance pharma and food materials, is tasked with expanding the group's traditionally funeral and memorial-centered business into the field of health management during life through research and development of health functional foods.
◇ Two sons at the forefront of management… second-generation succession speeds up
Along with Boram Group's business shift, attention is focusing on its governance structure and management succession. At the center of Boram Group's governance is Boram Sangjo Development. Boram Sangjo Development owns 100% of Boram Sangjo Leaders and Boram Sangjo Siloam. It also owns 100% of Boram Carnegie and Boram Convention, playing a role close to a business-type holding company that consolidates key businesses within the group.
Chairman Choi is the largest shareholder, holding about 70% equity in Boram Sangjo Development, and it is known that the elder son, Executive Director Choi Yo-el, and the younger son, Managing Director Choi Yo-han, each hold about 15%. Chairman Choi also holds 100% equity in Boram Sangjo Life.
How to streamline the seven mutual aid entities going forward is key. Depending on whether they strengthen specialization while maintaining each entity's customer base and sales organization, or integrate overlapping functions to raise group-level efficiency, changes are expected in business operations and governance. In particular, as second-generation management ramps up, how Executive Director Choi Yo-el and Managing Director Choi Yo-han divide roles is likely to affect the group's future strategy.
A source in the mutual aid industry said, "As Boram Group's business shift linked to funeral services proceeds in tandem with second-generation succession, how much Executive Director Choi Yo-el and Managing Director Choi Yo-han turn the streamlining of existing businesses and the discovery of new businesses into results will determine the next 10 years of the group."