report 2011 korea post annual report - serving the postal...

www.koreapost.go.krKorea Post Seorin-dong Jongno-gu Seoul(Seoul 110-110 Korea) Tel_+82-2-2195-1082~6 Fax_+82-2-2195-1089

2011 KOREA POST Annual Report

2011KOREA POST Annual Report


Moment of Red Passion

2011 KOREA POST Annual Report

contents

Statistics

58 Statement of Position60 Revenues62 Postal statistics 63 Postal savings and insurance63 Issuance of cashier’s check 64 Types of insurance plans available

652011 Postage Stamps67Post Office Customer Service Charter

Major Achievements

12 Community outreach14 Evaluations by external organizations

Business Areas

18Postal service21 Postal financial service24 Online services27 Global service

Major Projects

32 Performance judged in relation to preset goals33 Building up the competitiveness of the organization35 Working hard to support the Korea Post family37 Postal systems powered by world-class IT technologies38 Simplified authorization via PostNet39 Achieving innovation in the logistics system40 Enhancing reliability in delivery service42 Operating customer-oriented financial services

Sustainable Management

46 Advancing low-carbon green growth47 Reinforcing financial soundness48 Reinforcing our role as a state-run corporation52 Presenting scholarship certificates53 Enhancing management efficiency54 Promoting postal culture

Greetings from the President

6 Our Vision and Mission

7 Organizational Chart

8 Our History

52011 Korea Post Annual Report

4

Korea Post continues to move forward toward a brighter future

The global economy is reeling from the back-to-back credit rating downgrades of advanced countries and the challenges stemming from the recent European sovereign-debt crisis. Although governments across the globe are joining hands to find solutions, financial markets remain jittery and uncertain. Postal services worldwide are also suffering a blow from the ongoing financial crisis. The decrease in mail volume due to the advancement of IT technologies and the fierce competition following the opening of the postal market are adding to the difficulties faced by postal services. However, in spite of such challenges, Korea Post has pushed even harder to achieve innovation throughout 2011. We drastically improved the quality of our postal service by advancing into new businesses and fostering strategic products such as e-Green Post, the door-to-door parcel delivery service, and EMS. We fortified our financial services and made them more accessible by expanding the 365 ATM Corners and building partnerships with commercial banks. We also remained true to our mission as a state-run corporation through focusing our resources on supporting the underprivileged who are often marginalized from welfare services, such as parentless children, seniors without family, the disabled, and immigrant women. In addition, we enhanced our competitiveness by carrying out an organizational reshuffle and introducing the Next-Generation Managers program aimed at supporting talented young staff members, thus going a step forward in achieving sustainable management.

We are making significant contributions to the state purse through operating profitably based on such tireless efforts. Our quality service has been recognized through many accolades; we ranked first in the Public Administration Service Sector on the Korea Customer Satisfaction Index (KCSI); our EMS won the Gold Level in the Universal Postal Union's EMS Performance Award for five consecutive years; and our door-to-door parcel delivery service received the first prize in the National Brand Awards.

We are now preparing for another giant leap forward. We strive to pave the way for a brighter future instead of resting on our past achievements. We are setting new global standards and pioneering many industry firsts powered by Korea's renowned IT technologies. We will continue to give our best effort in advancing sustainable growth, reinforcing financial soundness, achieving management efficiency, and promoting our postal culture. We will remain dedicated to "bringing Korea closer together through postal service and elevating Korea Post's global status" based on our 128-year tradition of change and innovation. We thank you for your continued interest and support and promise to repay you with our efforts to move forward. Thank you.

May 2012

Kim Myong-ryong

President of Korea Post


President of Korea Post

Kim Myong-ryong



6

Headquarters & affiliates

Post offices

Our Vision and Mission / Organizational Chart

Korea Post is a government organization attached to the Ministry of Knowledge Economy. It has a self-supporting system unlike other government organizations funded by taxes. Korea Post was established in July 2000 in an aim to better respond to the opening of the state-run postal market. Since then, Korea Post has continued to reinforce its competitiveness to rival private corporations through trimming the management organization, improving the support process, and achieving business standardization of different business areas and offices.

Our Vision and Mission Organizational Chart

To contribute to the public welfare through providing advanced postal services that are easily accessible by all people and based on a sound profit structure

Bringing Korea closer together through postal service and elevating Korea Post's global status

Vision

Mission

Postal service that ensures maximum satisfaction and consumer finance that brings greater joy to all

⇒ Promoting public welfare through the sustained development of postal service and contributing to the nation's economic progress

Slogan

Planning and Management BureauSupporting Division

Postal Savings Bureau

Postal Insurance Bureau

Bureau of Posts

Breau of Logistics

General Services DivisionInspector DivisionPublic Relations Division Compliance Support Division

General Management DivisionFive Divisions

Postal Finance Policy DivisionFour Divisions

Postal Insurance Planning Division Four Divisions

Postal Policy Division Five Divisions

Postal Logistics Division Two Divisions

ㅇ Providing public services for citizens and communitiesㅇ Promoting co-prosperityㅇ Providing eco-conscious postal services and reinforcing the social safety net

ㅇ Creating a forward-thinking business structureㅇ Developing growth potentialㅇ Solidifying the foundation for sustainable growth

Expanding Korea Post's role as national infrastructure

Creating an exemplary state-run corporate model3

ㅇ Reinforcing growth potentialㅇ Enhancing the quality of the postal serviceㅇ Advancing postal infrastructure to meet global standards

ㅇ Strengthening business competenceㅇ Building the foundation for sustainable growthㅇ Pushing the boundaries of the postal market

Further improving the postal service

Sharpening the competitive edge of postal insurance service1 2

4

FourCorporate Strategies

Mail Centers: 24 (16 fourth-grade and 8 fifth-grade centers) International Post Office: 1 (fourth grade) Logistics Centers: including 1 (fourth grade)Military Post Offices: 25 sixth- and seventh-grade post offices and 61 licensed post offices

Total Fourth grade Fifth gradeSixth and seventh

gradesSpecial community

post officesLicensed post

officesPostal agencies

3,641 118 130 1,743 760 103 787

Total Korea Post Knowledge Economy Officials Training Institute

Korea Post Information Center

Supply & Construction Office of Korea Post

Regional Offices

13 1 1 1 1 9

Korea Post


8

Our History

We have become what we are today thanks to the continued support and encouragement of all Korean people. As Korea's representative public corporation, we will never rest in fulfilling our mission to shape a brighter future of the industry and rise as a world-class postal service.

Milestones

In the 1800sOur History In the 1900s In the 2000sApril 22, 1884. The Postal Directorate is established

November 18, 1884. The Postal Directorate opens to the public

March 23, 1900. The Office of Communication under the Ministry of Agriculture, Commerce and Industry of the Korean Empire is established

August 15, 1948. The Ministry of Communications of Korea is founded

December 23, 1994. The name is changed to the Ministry of Information and Communication

July 1, 2000. Korea Post is launched

February 29, 2008. Korea Post becomes attached to the Ministry of Knowledge Economy

July 1, 2011. Korea Post celebrates its 11th anniversary

We take pride in our 128 years of tradition that has continued since the inception of the Postal Directorate in 1884.

Community outreach 12

Evaluations by external organizations 14

Major Achievements


2011 KOREA POST

Annual Report


12

Community outreach

Major Achievements Community outreach

Programs Amount No. of

recipients Specifics

Setting up sisterhood ties with underserved families

110 million KRW

1,100Supporting the cost of necessities and living expenses for the underprivileged and doing volunteer work

Providing free meals to seniors living alone

20 million KRW

2,000 per month

Providing free meals to underprivileged seniors living alone through the Korea Post Community Service Group

Providing public services tailored to local communities

100 million KRW

2,357

Providing public services tailored to the needs of local communities in association with volunteer groups at local post offices

Supporting the 365 Volunteers

200 million KRW

607Supporting quarterly community service events for 224 volunteer groups of postal workers

Hosting the Nationwide Love Sharing event

100 million KRW

6,827

Providing goods and community services for local underprivileged neighbors in the month of December each year through local post offices

Love Sharing Camp for children staying at welfare facilities

130 million KRW

484

Inviting children from welfare facilities at the end of each year to the Hansarang Concert and the camp for cultural experiences

Expanding public services by using the national network of post offices

Programs Amount No. of recipient

Partner organization Specifics

Operating Hansarang Home and supporting medical expenses for pediatric cancer patients

190 million KRW 1,840 Korea Childhood

Leukemia Foundation

Operating Hansarang Home at five locations for pediatric cancer patients and their families and supporting medical expenses Hosting camps for cultural experiences

Caring for the emotional needs of children at welfare facilities

130 million KRW 2,021 National Child

Protection AgencySupporting living expenses and expenses for education and cultural activities for 35 child protective services across the nation

Building a social safety net for multicultural families

100 million KRW 14,906 Korea Foundation for

Women

Providing shelters and programs for migrant women suffering from domestic violence Running social adjustment training programsHosting the Writing Contest based on the theme of multicultural society

Night-time care service for patients without family

600 million KRW 3,320

Korea Regional Self-Support Center Association

Providing night-time care service for patients without family using low-income female caregivers

Tutoring service for teenagers with disabled parents

400 million KRW 480

Korean Society for Rehabilitation of Persons with Disabilities

College students serving as mentors of teenagers with disabled parents by providing tutoring servicesProviding support through the Post Office Hope Plus Savings

National Wheelchair Basketball Game 120 million KRW 250 Korea Wheelchair

Basketball Federation Organizing the National Wheelchair Basketball Game to promote sports for the disabled

Others 130 million KRW 1,094

The Anglican Church of Korea, Open Welfare, etc.

Providing medical care for seniors in need, helping homeless women become self-sufficient, and hosting camps for children who are heads of their households

Offering personalized community outreach programs in partnership with welfare experts

Our first attempt to reach out to the communities we serve was the scholarship program for underprivileged, parentless students in 1995. In 2000, our community outreach kicked into a higher gear. Since then, we have continued to strengthen the social safety net for disadvantaged children, seniors, and the disabled. We also strive to fulfill our social responsibilities as a state-run organization. We are operating the Korea Post Public Service Steering Committee, which is composed of external social welfare experts, in order to more systematically conduct community outreach programs with far-reaching effects. We have provided a total of 34.17 billion KRW to 445,000 recipients as part of 165 programs throughout 2011.

Reinforcing community outreach programs

Korea Post strives to improve the quality of life for the disabled through various activities including support for cancer treatment expenses for the disabled, tutoring services for teenagers with disabled parents, and hosting the National Wheelchair Basketball Game. In particular, the Korea Post Presidential Cup National Wheelchair Basketball Game celebrated its 10th anniversary in 2011. It has helped to increase the self-esteem of disabled players and promoted interest in and understanding of sports for the disabled.

Providing support to improve the quality of life for the disabled

Korea Post helped open Hansarang Home in five locations to offer accommodations and emotional support programs for pediatric cancer patients receiving outpatient treatment and their families. Art therapy, camps for cultural experiences, and many other programs designed to increase the inner strength of patients are available, in addition to aid for treatment expenses to help reduce the families’ financial burden. We plan to make further improvements and expand Hansarang Home into one of Korea Post’s central community services.

Supporting both pediatric cancer patients and their families through Hansarang Home

In order to help migrant women who came to live in Korea through marriage better adjust to Korean society, we are supporting costs for mail and packages from migrant women to their home countries. Through the MOU concluded between Korea Post and Regional Offices and local government bodies, each local government is charged with earmarking budgets and conducting promotions for multicultural families, while post offices nationwide offer 10-15 percent discounts on EMS fees. In 2011 alone, EMS fees totaling 110 million KRW were provided for 23,000 dispatches. Local post offices are also contributing to eliminating bias against multicultural families and improving their well-being through staging various events involving multicultural households.

Providing EMS fees to multicultural families

Children/teenagers Seniors Women

Providing support for pediatric cancer patients,

etc.45,951 / 14.388 billion KRW

Providing medical care for low-income seniors, etc.

140,650 / 7.165 billion KRW

Helping migrant women become self-sufficient

24,989 / 2.141 billion KRW

Disabled Low-income workers

Funding cancer treatments for the disabled, etc.

27,962 / 6.091 billion KRW

Support through the Happiness of 10,000 Won Insurance

205,771 / 4.39 billion KRW

445,323 in total / 34.175 billion KRW

Financial Aid in 2011

Postal savings 1.8 billion KRW for three projects

Postal Insurance 4.76 billion KRW for 18 projects

Total 6.56 billion KRW for 21 projects


14

Ranked first in general public service management on KCSI for 13 consecutive years

Korea Post’s postal service scored 77.2 points on the Korean Customer Satisfaction Index (KCSI) supervised by KMAC, which is the highest in the sector’s history, and achieved the feat of ranking first for 13 consecutive years in general public service management. In addition, Korea Post received the CS Contribution Award, which was given in celebration of the 20th anniversary of KCSI, in recognition of its past achievements.

Ranked first in corporate service management on NCSI for 10 consecutive years

In the 2011 National Consumer Satisfaction Index survey, conducted jointly by the Korea Productivity Center, The Chosun Daily, and the University of Michigan and sponsored by the Ministry of Knowledge Economy, evaluating 226 local public and private organizations and corporations in 53 industries, we ranked first in the corporate service management sector.

In the service quality evaluation of UPU’s EMS Performance Award in May 2011 that surveyed 152 EMS member countries, Korea Post was awarded the Gold Level, the highest prize. This recognition, and the fact that Korea Post has received the Gold Level for five consecutive years, testifies to the excellence of Korea’s postal service. Korea Post received high scores in the on-time delivery of EMS, the real-time transmission service of delivery information, and the on-time delivery of mail. In particular, Korea Post was recognized for its contributions to the improvement of service quality by providing real-time information on mail requiring customs clearance by using PostNet, a state-of-the-art IT information system, and reducing the time required for customs procedures and increasing the real-time delivery information transmission rate.

Awarded the Gold Level in UPU’s EMS Performance Award for five consecutive years

Korea Post’s courier service strives to set itself apart from private couriers through building an efficient system that ensures speedy and accurate service and remaining attentive to the individual needs of each customer. Thanks to its unsparing efforts to win customer trust and improve service quality, it continues to occupy the top spot in the door-to-door delivery sector of many customer satisfaction surveys conducted by private organizations.

Korea Post’s door-to-door delivery ranks first in different customer satisfaction surveys

ㆍRanked first for five consecutive years on NCSIㆍRanked first for seven consecutive years on K-BPIㆍRanked first on the list of Korea’s Most Respected Companies for three consecutive yearsㆍRanked first on NBA

Our postal IT system achieved CMMI Level 3 in 2006, CMMI Level 4 in 2009, and finally the highest rating of CMMI Level 5 on September 29, 2011. This recognition demonstrates that Korea’s postal IT system process has reached an optimum level on the global stage.

ㆍCMMI (Capability Maturity Model Integration) is an internationally recognized process improvement approach developed by the Software Engineering Institute of Carnegie Mellon University with support of the US Department of Defense. It evaluates the quality of IT services in five levels.

Our postal IT system achieves CMMI Level 5

The Korea Post Financial Call Center received the KSQI mark from KMA in June 2011 for the fourth consecutive year. The certification is in recognition of excellence in “customer reception,” “customer counseling and request management,” and “counseling closing.” Also, we received the KS mark from the Korean Standards Association in November 2011 for the third consecutive year by scoring over 80 points in the evaluations for quality management standardization, establishment of organization and system, and the operation of services.

Certification from KSQI and KS

Our financial service achieved CMMI Level 4 in 2011, following a CMMI Level 3 in 2009. This improvement testifies to our efforts to continue developing advanced systems and building databases in order to enhance overall service quality and conduct projects more efficiently.

Our financial system achieves CMMI Level 4

Evaluations by external organizations

Evaluations by external organizationsMajor Achievements

Postal service 18

Postal financial service 21

Online services 24

Global service 27

Business Areas


2011KOREA POST

Annual Report


18

Use of e-Green PostUse of contract bulk catalog service

Postal service Business Areas

The 2011 Korea Philatelic Exhibition – experiencing today’s global culture through stamps

The 2011 Korea Philatelic Exhibition was held at COEX in Seoul for five days from July 28 to August 1 in 2011 under the theme of “experiencing today’s global culture through stamps”. The exhibition consisted of diverse events and programs designed to offer the opportunity for teenagers to learn and explore the world of postage stamps. In order to offer visitors more attractions and knowledge about stamps, a number of exhibition halls were set up, including the Stamp Exhibition Hall, Global Stamp Culture Hall, Rare and Precious Korean Stamp Exhibition Hall, Postal Service Promotion Hall, and Stamp Culture Hall. Historic Korean stamps were also put on display, such as stamps issued in celebration of winning the bid for the 2018 Winter Olympic Games and the Munwi Stamp (the Korea's first stamp) and an envelope stamped with the Munwi Stamp and the postmark of its release date.

Postal service e-Green Post Service (hybrid mail)

We launched the e-Green Post Service in full scale in May 2004 by equipping the mail centers in Uijeongbu, Daegu, and Jeonju with a hybrid mail production system. The process from submission to the delivery is streamlined to reduce logistics costs and delivery time and to offer a more personalized, advanced postal service. In February 2011, we drastically cut the e-Green Post Color Service fees to make the service more accessible, thereby increasing the use by 21 percent in 2011 compared to 2010.

2007 2008 2009 2010 2011

Quantity 86,243 94,551 99,256 112,949 136,617Sales 35,389 43,096 47,678 52,358 67,737

(unit: thousand pieces, million KRW)

Since August 1998, we have been selling a diverse range of invitations and cards for weddings, birthdays, and other special occasions, as well as the Gift and Card Set composed of a congratulatory gift and a card.

Special occasion cards to deliver personalized messages

Use of special occasion cards

2007 2008 2009 2010 2011

Quantity 2,461 2,165 2,062 2,034 1,973Sales 4,286 4,060 3,854 3,774 3,738

(unit: thousand cards, million KRW)

Contract bulk catalog service

We introduced the contract bulk catalog service in December 2007 to offer discounts for those sending catalogs in bulk and to more effectively compete against private catalog delivery services. Previously, a 60 percent discount was given across the board to all who dispatched 100,000-300,000 catalogs at one time. However, different discount rates are now applied from a minimum of 49 percent to a maximum of 60 percent in accordance with the number of catalogs dispatched (from 50,000 to 300,000) and their destinations (within the same area and across different areas).

2008 2009 2010 2011

Quantity 87,213 96,258 121,391 140,185Sales 32,811 37,696 43,520 47,918

(unit: thousand catalogs, million KRW)

Contract bulk registered mail service to reinforce the competitiveness in the fieldSince its introduction in June 2005, the number of users of the contract bulk registered mail service has continued to increase. The contract bulk registered mail service provides discount rates for those entering into a contract with a post office and dispatching registered mail in bulk. In particular, the delivery information is entered into the business portal (http://biz.epost.go.kr) in advance to enable users to check delivery information online.

Use of contract bulk registered mail service

2007 2008 2009 2010 2011

Number of users 19 26 184 228 389Quantity 14,907 20,059 29,141 32,114 32,142

Sales 25,533 35,166 50,077 57,035 57,958

(unit: thousand mails, million KRW)


20

Number of newly installed 365 ATM Corners each year

Number of 365 ATM Corners for each Regional Office

Increase in partnered institutionsSales of ePost Shopping

Handled items

Use of services through partnerships

ePost Shopping

Korea Post launched ePost Shopping in 1986 in an aim to widen additional service options, revitalize the economy of rural communities, and to improve the distribution structure through encouraging direct marketing between producers and consumers. We market a great variety of agricultural, marine, and livestock specialties through post offices across the nation. As of late December 2011, 7,369 individual products of 465 different types are on sale, with supplies increasing each year. Customers can select and purchase products at the nearest post office, by telephone (1588-1300), and on the ePost Shopping website (http://mall.epost.go.kr). The accepted payment methods include cash, credit cards, and bank-to-bank transfers.

2007 2008 2009 2010 2011

Number of handled products 6,403 7,010 7,282 7,237 7,369

Number of products sold 5,767 5,878 5,994 6,461 7,188Sales 143,637 154,231 161,961 176,391 196,722

(unit: thousand products, million KRW)

(as of Dec. 31, 2011)

4,499

2,350

166117

2

Postal financial service

Many private financial institutions have partnered with Korea Post to offer access to their financial services at post offices. Customers in both cities and rural areas can take care of diverse financial needs at post offices, including making deposits and withdrawals, exchanging currencies, making remittances abroad, and even paying utility bills.

Providing access to comprehensive financial services through partnerships

2007 2008 2009 2010 2011

Number of partnered financial institutions 129 142 147 156 172

Increase (%) 12.2 10.1 3.5 6.1 10.3

We continue to install 365 ATM Corners for customers to enjoy diverse financial services with greater convenience at lower prices.

The 365 ATM Corner continues to expand

2007 2008 2009 2010 2011 Total

Number 170 171 122 77 132 672

The 365 ATM Corner is set up at 51.7 percent of all 2,769 post offices

Seoul Gyeongin Busan Chungcheong Jeonnam Gyeongbuk Jeonbuk Gangwon Jeju Total

Total 164 288 235 206 150 170 100 103 16 1,432

2007 2008 2009 2010 2011

Cases Fees Fees Fees Cases Fees Cases Fees Cases FeesAccessing services provided by partnered financial institutions

3,372 4,149 3,058 3,708 2,742 3,134 2,547 2,935 3,038 3,342

Submitting requests for the issuance of partnered credit card

1,074 5,917 966 7,200 921 8,705 853 10,270 518 9,181

Payment collection 19,502 2,414 19,704 2,590 26,374 3,701 27,084 3,785 27,908 4,030Opening stock accounts 307 996 611 1,091 768 1,262 717 1,198 732 1,257Using ATMs 7,325 3,031 7,275 2,811 7,448 2,763 7,415 2,994 7,545 2,818e-Banking 1 3 744 194 1,254 309 1,999 442 3,304 422Total 31,581 16,510 32,358 17,594 39,507 19,874 38,616 21,182 43,045 21,050

(unit: thousand cases, million KRW)

Postal financial serviceBusiness Areas

Agricultural products

Marine products

Livestock products

Handicrafts

Traditional liquors

327

Agricultural products

97

Marine products

14

Livestock products

25

Handicrafts

2

Traditional liquors


22

Postal financial serviceBusiness Areas

Supporting public projects by depositing into the Fund for Repayment of Public Funds (FRPF)By depositing into the FRPF, which is managed by the Ministry of Knowledge Economy, we are contributing to increasing social overhead capital and fostering a sound financial market. As a result, we are expanding the role of our financial service in boosting the national economy.

FRPF and public bonds

2007 2008 2009 2010 2011

FRPF 49,250 29,698 14,304 13,123 1,545

Public bonds 237,012 189,005 118,090 101,463 118,152

Total 286,262 218,703 132,394 114,586 119,697

(unit: hundred million KRW, based on average balances)

Supporting the development of the real economyThrough investing in different financial instruments, we have contributed to advancing the steady growth and reinforcing the competitiveness of small and mid-sized companies. We are also supporting local economies through investing in SOC, BTL, and public funds and through depositing funds with local financial institutions.

Support for the development of the real economy in 2011

Savings Insurance Subtotal

Supporting SMEs 3,818 1,191 5,009

Supporting local economies

SOC/public funds 353 642 995

Depositing funds with local banks 5,699 - 5,699

Operating regional offices 32,815 2,600 35,415

Subtotal 38,867 3,242 42,109

Total 42,685 4,433 47,118

(unit: hundred million KRW)

Our financial service has a nationwide network of 2,769 operations in large and small cities as well as remote areas to ensure easy access for everyone.

Nationwide financial network in operation

Improving accessibility through expanding TCM sales channels

Korea Post Insurance launched Tele-Cyber Marketing (TCM) to build a solid profit-making foundation and to improve accessibility for customers on December 1, 2010, thus taking a step forward from the past marketing practices centered on counter and financial consultant sales. In 2011, the total actual contract amount reached 181.1 billion KRW and the total monthly premiums actually paid stood at 403 million KRW.

Making loan services more convenient and accessible

Postal insurance loans are micro-credit small loans to policyholders that still retain benefit protection. In order to lessen the burden of loan rates, we eliminated extra interest for the overdue payment of loans against return premiums and improved the partial redemption system for interest for loans against return premiums. We also developed convenient services such as the issuance of detailed statements of loans against return premiums for the purpose of applying for government grants and the expansion of loans against inherited pensions amongst retirement plans.

Improving the insurance claim payment process

In order to expedite the payment of insurance money and add to customer convenience, we made an automatic bank transfer possible through the Korea Post Financial Service Call Center (Tel. 1588-1900) for pension plans of which the policyholder is identical to the beneficiary. Even when the policyholder and the beneficiary are different, benefits can now be paid to the beneficiary using online banking or mobile banking. We also began to announce maturity and life benefits via SMS in addition to mail to increase customer convenience. We upgraded the system to enable the policyholder of multiple insurance policies, each of which benefits a person different from the policyholder, to make desired changes at one time with less hassle.

561

697

1,511

Total2,769

Operations in gu (in large cities)

Operations in si (for mid and small sized cities)

Operations in gun (including the civic units of eup and myeon)Gangwon

176

50

126

Jeonbuk230

166

64

Busan472

231

79

162170

178

61

Gyeongin409

Seoul254

254

2017

Jeju37

295

71

Chungcheong431

65

244

62

Jeonnam352

46

Gyeongbuk408

259

87

62


24

Issuance of proof of delivery

Use of online content certification

Procedure of sending content-certified online mail

Payment via mobile phones

Online services

Leading the shift towards Internet-based electronic documentation and paperless service Our online post office ePost enables customers to request door-to-door delivery and EMS, send

customized mail (mail created online is printed on the stationery paper of the user’s choice and sent), and enjoy shopping online. The number of registered members has reached over 3.1 million as of late 2011. In addition to services mainly involving micropayments such as postal services, the rechargeable electronic wallet, and the Postal Kiosk (unmanned postal counter), we also introduced a mobile payment system that allows users to pay via their mobile phones and launched the e-Green Post in association with Hancom for users to create documents on Hancom Office programs and request their dispatch.

Providing a diversity of services through ePost

e Post Payment gateway

Customer Mobile communications service provider

▣ 휴대폰 결제

확인 취소

1. Select the mobile payment when making a purchase

3. Send social security number and telephone number

5. Request for the verification number

10. A transaction confirmation text message is sent to the user

7. Type in the verification number

9. Contents are transmitted

2. Request the mobile payment

8. The verification number is confirmed

14. Payment made

12. The mobile phone bill is paid

6.The verification number is sent via SMS

11.The mobile phone bill containing the

transaction is sent to the user

4. The first verification is completed13. Payment made

Customers no longer have to visit a post office to request content certification. We offer content certification online at our website. In particular, the certification of contents required for patent application and registration can be requested, browsed, reissued and saved online.

2010 2011 Note

Quantity 21,004 36,090 Service launched in March 2010Sales (thousand KRW) 110,484 203,288

e Post

The sender makes a request for the service and uploads the file

The production center prints the file on paper and

stores it

The document is sent through a post office to the recipient

Online issuance of proof of delivery We launched the online issuance service for proof of delivery to enable customers to request the document online and receive it without the need to take time and actually visit a post office.

676 cases of online issuance of proof of delivery from Feb. to Dec. 2011

2007 2008 2009 2010 2011

Quantity 2,329 2,264 2,278 2,336 2,048Sales 2,295 2,235 2,267 2,334 2,043


Online servicesBusiness Areas

Sales from ePost

2007 2008 2009 2010 2011

Postal service 4,095 4,612 5,350 6,589 1,545ePost Shopping 43,790 47,413 50,266 59,484 118,152

ePost Open Market and B2B 2,091 28,082 34,305 33,762 119,697

(unit: million KRW)

Providing an advanced hybrid service in association with Hancom (service launched in July 2011)

Create a document using Hancom Office

(Hangul 2010)

Click the e-Green Post service button on the

tools menu

The request is submitted to ePost

The document is printed and sent to

the recipient

(unit: case, thousand KRW)

Online issuance process of proof of delivery

ePost5. Security module applied

6. Proof of delivery printed out by the customer

1. Issuance requested by the customer

2. Verification completed3. DB requested

4. DB provided

Customer


26

Sales of online stamp service

Yearly performance of EMS

Postal services via smartphone

In response to the rapid increase in the number of smartphone and mobile device users, Korea Post launched postal services via smartphone in three different stages from May 2011 to strengthen its competitiveness. A total of 14 postal services including Track & Trace are offered through six apps such as Post Office and ePost Shopping. Our apps have been met with enthusiasm from users and recorded over 280,000 downloads as of late 2011. The Mobile Webpage corner on the main page of the ePost website gives guidance about the types of postal service apps for smartphones and the installation method. We also offer customers the chance to explore services for smartphones and mobile devices on PCs.

Postal services via smartphone

Launched in Specific services Note

1st stage May 2011Browsing zip codes, using Track & Trace, applying for the postal door-to-door delivery service(in association with Post Office S Banking)

3 services

2nd stage Jul 2011 EMS application, Specialties of My Hometown, Postal Handbook 3 services

3rd stage Oct 2011Special occasion cards, electronic picture cards, My Own Stamp, ePost Shopping, flower delivery, Gift & Card Set, invitations, mobile apps associated with private credit cards

8 services

Online stamp serviceAs part of our efforts to develop advanced online services to add to the convenience of customers, we started the online stamp service, which enables customers to print out stamps downloadable at the ePost website (www.epost.go.kr) at any time anywhere, rather than going through the inconvenience of visiting an offline post office or a stamp seller.

Online stamp service ▼

Press covering the launch of the service ▼

2010 2011 Note

Number of stamps sold 37,635 86,659 Service launched in July 2010Sales 13,331 30,723

(unit: thousand KRW)

Global service In 2011, Korea Post ranked first among local and multinational EMS providers in the nation’s express

mail market by surpassing 6.92 million mail items handled and recording 269.7 billion KRW in sales. We are rapidly emerging as a globally leading EMS service provider by securing new growth engines through strategic partnerships with private corporations in Korea and abroad, expanding the EMS Guarantee Service, and closely cooperating with overseas postal services.

Globally recognized EMS service

Korea Post is actively taking part in events organized by the UPU, such as the Postal Operations Council, the Council of Administration, and the Postal Regulation Forum, and contributing to highlighting the advanced practices of Korea’s postal service and building ties with representatives of postal regulatory authorities and postal service providers from across the globe. We attended the Postal Operations Council held in April 2011, participating in the major discussion on the efficient operation of international mail and drawing interest by introducing our Customs Pre-advice readiness. We also actively set forth constructive opinions for the development of international mail at the Council of Administration held in October 2011.

Elevating the prestige of Korea’s postal service as a member of the UPU

2007 2008 2009 2010 2011

Mail items handled 4,499 5,037 5,969 6,229 6,923Sales 163,767 192,377 229,012 243,416 269,674

Total sales from international mail 197,759 227,008 268,523 290,052 324,810


Global serviceBusiness Areas

Supporting the development of postal infrastructure in developing countries through making donations for UPU’s Quality of Service FundKorea Post is supporting the development and restoration of postal infrastructure in developing countries or disaster-stricken areas through making donations for UPU’s Quality of Service Fund. In 2011, Korea Post donated 100,000 USD for the UPU-led regional development project for the improvement of ordinary mail in the Asia-Pacific area. We will continue to help postal services of developing countries achieve growth in association with the International Bureau of the UPU.


28

Global serviceBusiness Areas

The quarterly Board of Directors (BOD) meeting of the Kahala Posts Group (KPG) was attended by 20 KPG Board of Directors including those from member postal services of ten countries and the Management Team. The purpose of the meeting was to discuss ways to improve the on-time delivery and service quality of EMS – one of the biggest focuses of Kahala, to increase the number of member postal services, to tackle issues arising from line-haul, and to discuss Customs Pre-advice with the US and Europe. Also, Korea Post sought to collaborate with other Kahala member postal services to develop the delivery service for electronic commerce to serve more customers and advance into a new market. Korea Post currently boasts an on-time delivery rate of 98 percent, the highest among the ten member countries, and continues to achieve explosive annual growth of more than 10 percent in sales from EMS.

Expanding the scope of activities as a BOD member of Kahala Posts Group in 2011

Exports of local postal device manufacturers

Increasing exports of local digital postal device manufacturersWe have made significant contributions to enhancing the global status of Korea’s postal industry by making efforts to boost exports of locally developed, cutting-edge postal technologies and devices on a governmental level since 2006. Thanks to such continued efforts, the total amount exported through 2011 reached 1.1655 trillion KRW. We plan to design and offer more customized support programs in the near future through partnerships with international organizations and pertinent government organizations.

Major export items: postal systems, PDAs, printers (mobile, receipt, and label), mail sealers, scales, etc.

Year Exported amount (hundred million KRW)

Specifics

2006 757 PDAs, printers, mail sealers, mail folders, etc.

2007 1,220 Postal systems 36.9 billion KRW, postal devices 85.1 billion KRW



2010 1,834 Postal systems and devices 183.4 billion KRW

2011 2,281 Postal systems 5.1 billion KRW, postal devices 223 billion KRW

(accumulated total since 2006: 1.1655 trillion KRW)

The annual Korea-China-Japan High-Level Postal Meeting provides the forum for postal services of the three countries to talk about key postal policies and seek cooperation for further development. The meeting was held in Xian, China from October 12 to 15, 2011. The head of Korea Post’s Bureau of Posts attended the event as the chief delegate and discussed major issues affecting postal services of the three countries. The agenda included the postal business performance in 2010, notable postal policies, current conditions of electronic commerce and future prospects, as well as ways to strengthen the competitiveness of EMS. The meeting offered the chance for the three countries to exchange ideas, gain knowledge of the latest developments of each local postal market, and share opinions about ways to make progress in close cooperation with each other.

Participating in the 12th Korea-China-Japan High-Level Postal Meeting

Sharpening our competitive edge in financial servicesWe are continuously seeking to strengthen international ties in financial service and remittance through playing an instrumental role in meetings with major international organizations such as the UPU, the APPU (Asian-Pacific Postal Union), and the WSBI (World Savings Banks Institute), while also working hard to raise our competence and expertise in international finance and to flexibly respond to uncertain global financial markets.Throughout 2011, we concentrated on advancing the status of postal savings and insurance through organizing financial training for APPU member countries (April), successfully chairing the annual APPU Congress (July), and supporting the remittance development seminar organized by the UPU in Seoul (October). We also hosted the high-level meeting between Korea and Thailand in April, testifying to our will to expand our global network of partners and foster technological ties to advance growth of global postal service.

Major Projects



Performance judged in relation to preset goals 32Building up the competitiveness of the organization 33Working hard to support the Korea Post family 35Postal systems powered by world-class IT technologies 37Achieving innovation in the logistics system 38Enhancing reliability in delivery service 39Expanding customer convenience systems 40 Operating customer-oriented financial services 42


32

The management performance of Korea Post and its president is evaluated against the preset business goals and the results are announced each business year. The management performance report of 2011 was created and submitted to the management evaluation panel appointed by the Minister of Knowledge Economy. The management evaluation panel assessed Korea Post’s yearly performance based on the submitted report and interviews with the president and incumbent employees and created a proposal on measures to achieve further growth.

Stringent management performance evaluation

Pertaining to Paragraph 1 under Article 2 of the Basic Act on the Evaluation of Government Performance and the Government Performance Evaluation Enforcement Plan, Korea Post established the Korea Post Performance Management Enforcement Plan in 2011. We sorted out ten policy goals (three for the Bureau of Posts, four for the Postal Savings Bureau, and three for the Postal Insurance Bureau) and came up with 14 performance indicators for self-directed performance evaluation. Also, we are operating the Postal Service Subcommittee consisting of six external specialists in order to more accurately and objectively analyze Korea Post’s performance in different projects and stay on the right track and reap the desired results by utilizing the knowledge and expertise of the specialists. In 2011, we received high evaluations for successfully pushing ahead with a program entitled Reinforcing Community-Boosting Postal Management Practices, which was one of the national policy tasks aimed at reinforcing self-sufficiency among low-income families reviewed and evaluated by the Prime Minister’s Office.

Self-directed evaluation of performance as a government organization

We began to conduct management evaluations of postal organizations under our supervision in 1997 to “encourage a competition in good faith among supervised organizations and reward them in accordance with performance.” It contributed to the improvement of postal service performance, the operating efficiency, and the development of responsible management practices of post offices. We made little change to evaluation indicators in 2011 to maintain consistency and narrowed the score gap between post offices to lighten their burden regarding immeasurable items. We also began to apply this management evaluation system to not only subordinate post offices but also their supervising offices to enhance work efficiency and credibility of the results. Notably overloaded post offices were recognized for contributions they have made, while the special incentive system for individual employees receiving high evaluations were newly created and tested. To improve the conditions of non-regular posts, we set aside 3.76 billion KRW as incentives for non-regular posts in 2012.

Management evaluation of organizations under the authority of Korea Post

In a bid to more flexibly respond to changes in today’s postal service industry, we reshuffled and realigned the previous organization composed of three bureaus, one office, Logistics Planning Bureau of Logistics and 27 divisions into three bureaus, one office, Logistics Planning Bureau of Logistics, Inspector General Inspector Division, Public Relations Public Relations Division and 25 divisions. We reinforced our policy and planning functions and expanded human resources for the Bureau of Posts, Postal Savings Bureau, and Postal Insurance Bureau to secure new growth engines, thereby achieving momentum to make greater leaps forward (reorganization put into action on July 4, 2011 and officially enacted on February 28, 2012).

Realignment of the organization

Performance judged in relation to preset goals Building up the competitiveness of the organization

Performance judged in relation to preset goalsBuilding up the competitiveness of the organization

Day-to-day management and execution of simple, repetitive jobs were delegated to directly supervised organizations to reinforce and expand the headquarters’ role in strategy designing and planning. To lay the solid foundation for responsible management practices in each region, we delegated authority regarding 36 jobs to directly supervised organizations including Regional Offices, expediting the work process. The 15 repetitive jobs that could not be handed over were commissioned to public organizations in compliance with the Exemption Act on the Operation of Postal Service in an attempt to maximize the efficiency of our organization.

Delegating administrative authority

Realignment of the organization

Changes

Realignment of organization Three bureaus, one office, Logistics Planning and 27 divisions → Three bureaus, one office, Inspector General, Public Relations, Logistics Planning and 25 divisions

Revision and establishment of divisions

■Investment Planning Division of Planning and Management Bureau → Postal Logistics Policy Division of Bureau of Posts■Compliance Support Division under direct control of the President → Treasury & Portfolio Management Division of Postal Savings Bureau

The name “遞信廳” (read chesincheong in Korean and translated as the Regional Communications Office) originated from “遞信局” (read chesinguk in Korean and translated as the Communications Bureau) of the Japanese Government General during the Japanese Colonial Rule. Not only has the name been a vestige of Japanese imperialism, but also it failed to encompass today’s fast-paced social and technological advances and to remain consistent with the other organizations and services of Korea Post. Thus, we changed the name to “地方郵政廳” (read jibangujeongcheong in Korean and translated as the Regional Office), with “郵政” literally meaning postal service (organization revision, executed on May 30, 2011).

Changing the name of an attached organization

Results of surveyed customers and employees

Total Maintain as is Change Don’t care

Customers 1,869(100.0) 457(40.5) 949(50.8) 463(24.8)

Employees 1,533(100.0) 250(16.3) 1,225(79.9) 58(3.8)

Total 3,402(100.0) 707(29.6) 2,174(63.9) 521(15.3)

To improve customer service and efficiency of post offices nationwide, we revised Bylaws on the Establishment of Offices and Organizations under Supervision of Korea Post and separated the post of the head of the Customer Support Team at overloaded fourth-grade supervising offices in Seoul, Incheon, and Gyeonggi areas into the two posts of the head of the Postal Sales Team and the head of the Financial Sales Team on January 1, 2012.

Revising the organization under supervision of fourth-grade supervising offices

Specifics

Target

■ Fourth-grade supervising offices (offices led by fourth-grade government officials) in Seoul and Gyeongin (10)

- Seoul Regional Office (Gwanghwamun, Gwangjin-gu, Yeouido, Gangnam-gu, Seocho-gu) - Gyeongin Regional Office (Nam-Incheon, Dong-Suwon, Anyang, Bucheon, Ansan)

RevisionsHead of Customer Support Team (sixth grade) → Head of Postal Sales Team (sixth grade), head of Financial Sales Team (sixth grade)

Major Projects

(unit persons, %)


34

We foster a prospective customer base and help children and teenagers cultivate a sound hobby and enrich their minds through teaching them the beauty of letter-writing and postage stamps. We help run the extracurricular philately class at over 200 schools across the nation and operate the National Stamp and Letter Guiding Committee consisting of school teachers in an aim to expose more students to philatelic culture. We organized the 24th Korea Children’s Stamp Exhibition in April 2011 in Daejeon, which offered the chance for many to experience and explore the world of postage stamps.

Fostering prospective customers

To pay our respects to late employees who passed away at their posts, we began to erect memorial monuments for the deceased in 2006 and organize a commemorative event every year. We have also supported bereaved families by providing compensation funds and scholarships and helping them seek employment. Such a corporate culture serves to fortify solidarity among employees.

Holding commemorative events for employees who pass away at their posts and providing financial aid to their families

Working hard to support the Korea Post family

Working hard to support the Korea Post family

While our revenues went down due to the decrease in the volume of ordinary mail, our expenses rose on the back of mounting personnel expenses and commodity prices. In a bid to secure additional revenue sources and stabilize ordinary mail service, which is currently below the cost recovery rate, we raised postage for domestic mail by 20 KRW on October 1, 2011, five years after the last increase in 2006.

Readjusting postage

Type Weight Before After Note

Mail

Standard-size mail

Up to 5 grams 220 KRW 240 KRWMore than 5 grams and 25 grams or less 250 KRW 270 KRW

More than 25 grams and 50 grams or less 270 KRW 290 KRW

Non-standard-size mail

Up to 50 grams 340 KRW 360 KRWMore than 50 grams (for every 50 grams) 120 KRW 120 KRW

Adjusted postage rates

Compensation

Financial aid for the studies of

middle and high school students

Money gift for college freshmen

Employment support

Funeral held under the

name of the head of the supervising

office

Total

Beneficiaries 20 22 9 1 8 60

Support amount 150,000 17,000 18,000 474 27,229 212,703

※Nine bereaved family members of deceased employees were specially hired for technical posts such as the post office bookkeeper (accumulated total)

Support for families of the deceased in 2011

Major Projects

We introduced the Next-Generation Managers program, through which talented young staff members are selected and offered the chance to reinforce their competence through intensive training and hands-on experience of different posts to grow into future leaders of the postal service. Selected employees undergo specially designed courses and receive the chance to take part in training in Korea and abroad. They are also given priority when there are vacancies at higher-ranking organizations. The program is expected to strengthen the overall competitiveness of Korea Post by boosting the morale and minimizing the outflow of talented employees.

Selecting and fostering next-generation leaders of the postal industry

(unit: persons, thousand KRW)


36

Our highly detailed postal carrier route map, which was normally marked manually in the past, is now electronically optimized and managed using major pickup and delivery stops provided on PostNet and a GIS-based electronic map. This system ensures speedy, efficient pickup and delivery even when mail carriers are reshuffled and assigned to new zones. The electronic map of the Ministry of Public Administration and Security displays desired locations in accordance with both the lot-number-based address system and the street-name-based system and enables the user to print out the optimized delivery route and detailed information for each delivery destination.

Detailed postal carrier route map

The simplified and advanced authorization system offered on PostNet increases the convenience for managers and enables them to check and review work in progress in real time.

Simplified authorization via PostNet

Mail carriers used to be required to update delivery details on their PDAs and transmit the data to connected PCs at post offices. To eliminate this inconvenience, improve work efficiency, and maximize customer satisfaction by providing real-time information, we developed the real-time PDA program. This program, which enables customers to check the delivery status up to eight hours earlier than before, worked to reduce delivery-related complaints by 20 percent. Also, it notably expedited the entire pickup and delivery process and reduced the wait for the pickup service, improving credibility of our door-to-door parcel service and securing new revenue sources such as contract registered mail service. As the delivery status, the delivery vehicle log, and delivery-related statistics are entered on site, the PDA cradle and other accessories and devices are not needed, propelling us towards a greener Korea Post.

Real-time PDA service

Postal systems powered by world-class IT technologies

- The system is accessed by clicking the icon or entering the URL- Managers become easily distracted or occupied by other tasks- Junior staff members often take care of authorization on behalf of managers- Junior staff members are required to submit documented reports on major work in progress

- The system can be accessed by the jointly used account code of KMS- The management and supervision of the postal business are reinforced- No documented report is required as it became possible to check work in progress in real time

Previous system Simplified system

Manager

Employee in charge

KMS

① Authorization requested

② Request for authorization notified (eMAIL)③ PostNet accessed

and logged in (Log in)

④ Authorization carried out (different windows for different projects)

Manager

Employee in charge

① Authorization requested

② Request for authorization notified (eMAIL)

③ PostNet accessed and logged in (KMS accessed and logged in)

④ Authorization carried out(single window dedicated to authorization process)

KMS

Postal systems powered by world-class IT technologiesMajor Projects

We manufacture and provide Korea Post branded funeral supplies for deceased employees or their families to instill a sense of pride and loyalty for the company and build solidarity among all staff members.

Providing funeral supplies

※Distributed funeral supplies in 2011: 2,970 sets (each set consisting of condolence books, cups, and plates for 300 persons)

Seoul Gyeongin Busan Chung

cheongJeonnam

Gyeongbuk

Jeonbuk

Jeonbuk Jeju KEOTI KPIC SCOKP Korea

Post Total

Number of offices 26 45 43 35 28 35 17 20 4 1 1 1 1 257

Number of employees 9,778 10,264 7,295 5,338 4,151 5,446 2,374 2,287 668 188 364 93 389 48,635

Number of distributed sets 434 513 494 375 393 385 93 162 40 18 24 10 29 2,970

Details of distributed funeral supplies in 2011

To bolster productivity and the development of Korea Post through enhancing the quality of life of all our employees, we actively support in-house clubs and their activities. As of late 2011, 939 clubs are in operation.

Encouraging in-house club activities

2007 2008 2009 (actually operating clubs) 2010 2011

Number of in-house clubs 1,760 1,320 2,014 (417) 859 939Amount of financial support 119 138 139 109 84

(unit: million KRW)

(unit: post office/persoms/set)


38Enhancing reliability in delivery service

Achieving innovation in the logistics systemEnhancing reliability in delivery service

Major Projects

Korea Post’s mail carriers who were found to be dedicated to not only their original professions but also community outreach were invited to Cheongwadae, the Korean presidential residence, and received by President Lee Myung-bak on November 25, 2011 in recognition of their contributions to the promotion of the well-being of society.

Inviting mail carriers to Cheongwadae

Parcels and mail items in bulk were originally divided into bundles and tied with cords at the time of submission, but are now loaded and transported in standardized Korea Post containers. As a result, the parcel loading rate for each palette rose to 92.4 percent from 66 percent in 2010, dramatically reducing transportation costs and the workload of the destination mail center by eliminating the need to untie and organize bundles. We continued to further the efficiency of the work process nationwide by helping to make on-site changes at 24 mail centers and three logistics centers and sharing outstanding practices with other offices. Mail items are sorted in the night-time using the sorting machine of the Daejeon Exchange Center during seasons of drastic increases in mail volume, and in the daytime during harvests to make the most of the sorting machine and to effectively adjust the workload of mail centers. For faster, smoother delivery of mail, we newly purchased 570 transportation devices of 29 types, including wreckers, and replaced the old ones.

Enhancing the efficiency of the work process

Event covered by press ▼

Achieving innovation in the logistics system

In December 2011, Korea Post installed an advanced RFID system at the East Seoul Mail Center, Anyang Postal Logistics Center, Bupyeong Logistics Center, and Jinju Mail Center, all of which had been newly built or renovated, and expanded their logistics infrastructure.

Advanced RFID installed

In accordance with the Advancement Plan for Public Organizations (Jan. 2009) established by the Ministry of Strategy and Finance, Korea Postal Logistics, our affiliated public organization entrusted with mail transportation, and Kotrans Co. funded by Korea Post were merged on July 1, 2011 to increase consistency in mail transportation services and encourage the management rationalization of affiliated organizations.

The Ministry of Public Administration and Security has replaced the century-old lot-number-based address system with a new street-name-based address system, and continued to encourage its use through many angles. Thanks to such efforts, mail items marked with the new street-name-based addresses are showing a steady increase. Korea Post added street-name-based addresses to the existing database of lot-number-based addresses used to classify mail items and built an integrated database of both address systems that enables us to accurately and speedily classify mail with less hassle.

Creating an integrated database containing both old lot-number-based addresses and new street-name-based addresses

Database containing both lot-number-based addresses and street-name-based addresses

Integrating affiliated public organizations entrusted with mail transportation


40Expanding customer convenience systems

Operation of Postal Kiosks

We began to send announcements for the arrival of mail by SMS for ordinary mail, in addition to parcels, to add to customer convenience. We also upgraded the address change report system in association with the Ministry of Public Administration and Security so that the new address is automatically registered with Korea Post at the time of the move-in notification. We put into operation the unmanned postal counter system (Postal Kiosk) and the unmanned door-to-door parcel delivery service for the increasing number of single-person households, working couples, and others unable to stay at home during daytime.

Customer-friendly service designed to increase convenience

In order to reduce the wait time at post offices and add to customer convenience by diversifying channels for mail submission, we are operating unmanned Postal Kiosks at several locations. Postal Kiosks installed in public spaces such as subway stations are open year-round. Customers’ requests made at each counter are submitted online to post offices. We are making more micropayment options available (such as T-money and cell phones) and updating the standardized guidelines for customers to encourage more use.

Improving services by upgrading unmanned Postal Kiosks

※ Unmanned door-to-door parcel delivery service (currently at 24 locations): This service offered at apartment complexes enables residents to safely and conveniently send and receive parcels and registered mail using storage lockers without the need to make arrangements to meet the carrier in person. Services offered: Request for mail and parcel delivery (by Korea Post’s door-to-door parcel delivery service) Delivery of registered mail and parcels (by Korea Post’s door-to-door parcel delivery service)

※ Average daily transactions in 2011: 62 (37 for financial service and 25 for postal service)

2007 2008 2009 2010 2011

Kiosks in operation 130 139 139 132 132

The Mobile Post Offices are set up in disaster-stricken areas, event sites, and other places experiencing temporarily surging financial needs. A total of 27 the Mobile Post Offices opened in 2011 and stayed in operation for 203 days. The electronic displays on site were used to publicize Korea Post’s financial services (15) and postal services (18) and highlight major government projects.

The Mobile Post Offices

Postal service

Savings service

Insurance service

Moneyorder ATM Total

Number of transactions 3,738 544 41 35 5,014 9,372Sales 6,752 118,213 7,145 21,216 518,200 671,858

(unit: thousand KRW)

IT center

Dedicated line

Mugunghwa Satellite No. 5

Computer networkSatellite

communications service The Mobile Post Offices

Transactions made at the Mobile Post Offices

Expanding customer convenience systemsMajor Projects

Volume of mail handled at Postal Kiosks in 2011

System diagram

Yearly total Yearly total

Number of handled items Postage amount (thousand KRW)

2,301,956

3,759,579

1,4532,373

Monthly average Monthly average


42

To resolve problems arising from credit card abuse, such as weakened self-regulation and high commissions charged to merchants, the government is encouraging the use of the check card (debit card). In line with the government’s policy, Korea Post began to issue its own check card in December 2011 to actively promote financially sound and responsible consumption. The insecure magnetic stripe version was replaced by the built-in IC-chip version for enhanced security.

Issuance of postal check card

In a bid to promote the postal financial service and remain attentive to customer opinions through a wide range of media such as SNS and personal blogs, we selected the first-generation online finance supporters in 2011. The team consisted of 23 stay-at-home mothers, office workers, and students and carried out promotional activities for online financial products and related events through web cafes, blogs, and SNS providers from April to September 2011 (1,089 posts). Also, they proposed 205 ideas (an average of nine per person), such as the notification of the remaining time to stay logged in for online banking, and 44 were actually put into action.

Online Supporters

We tracked down unclaimed insurance policies and traced lost policyholders or beneficiaries, whose claim rights became extinct as two years have lapsed after policies matured or eligibility for benefits were met. We utilized the resident database of the Ministry of Public Administration and Security to trace policyholders of 66,000 forgotten policies with dormant insurance money totaling 15.5 billion KRW as of late September 2011 and notify them by sending mail and by informing online in an effort to protect the interests of customers. When insurance money remains unclaimed after a year from the date of notification, it is donated to Smile Microcredit Bank to help provide financial aid for low-income households to start businesses or seek employment and to support the bank’s efforts to reach out to those financially marginalized. The unclaimed money is paid to the original beneficiary when requested.

Informing policyholders and beneficiaries about unclaimed insurance policies

The Voices of Customers and Well of Information service is designed to collect and deal with comments of customers found across different channels (call center, website, post offices, etc.). It serves to improve customer satisfaction of postal insurance by promptly offering feedback and catering to individual needs of customers.

Korea Post Insurance initiating the Voices of Customers & Well of Information service

We launched the online insurance subscription service to enable customers to subscribe to an insurance plan online with greater convenience and without the need to pay a visit to a post office. An incentive of the discount rate of 0.5 percent, far higher than the normal rate ranging 0.1 to 0.3 percent, is given to those requesting automatic withdrawal. This service is expected to further improve customer satisfaction by streamlining the subscription process and expediting the insurability assessment. We will continuously strive to make insurance subscription easier and simpler for all customers.

Online insurance subscription service launched

Operating customer-oriented financial services

Operating customer-oriented financial services

My VOC

VOC handling within the system

VOC at each office

Managing the main page

Information winner of the month

Voices of Customers & Well of Information System

Main page

Chart of improvementsAnnouncements

VOC of our teamOutstanding teams for VOC handling

ImprovementsVOC registration handling

BEST PRACTICERegistered requests by type

Complaints and causesSQI

Information managementVOC handling General status Approvals box Announcements

Sales support information room

VOC management

Statistics for different groups Reports box Bulletin

Information winner management

Improvement management

Weekly report for the management Reporting line Archive

VOC per registration channel

Active portlet

Registering VOC

VOC Status /Statistics

Approvals management

Information forum

Information room

Detailed user information

Major Projects

※ Nine regarding systems, seven regarding depositing and money transfer, eight regarding products, four regarding insurance plans, and 16 regarding contents and publicity

Advancing low-carbon green growth 46

Reinforcing financial soundness 47

Reinforcing our role as a state-run corporation 48

Customer-centric management 52

Enhancing management efficiency 53

Promoting postal culture 54



2011KOREA POST

Annual Report


Our number of eco-friendly delivery vehicles reached 1,553 as of 2011, accounting for 40.7 percent of the 3,816 total vehicles. Among the 423 newly purchased and replaced vehicles this year, 335 are eco-friendly. We have also test-installed fuel savers and established the Ten Rules for Environmentally Responsible Driving to promote energy saving and go green with our delivery service.

Increasing the number of eco-friendly delivery vehicles

We built the PostNet Vehicle Maintenance System to analyze fuel consumption in real time and make improvements for the reduction of energy use. We are currently operating six electric automobiles on a trial basis for a low-cost, high-efficiency delivery service. We also brought in over 500 fuel savers to reduce fuel consumption and greenhouse gas emissions. Pilot operation of electric automobiles

Fuel saving

Work is in progress to build a paperless financial service counter system and thereby reduce the use of paper by 20 percent a year as an extension of Green Post 2020 to advance low-carbon green growth. We are also planning to replace all paper reports at the more than 2,800 financial service counters across the nation with electronic versions from August 2012.

Pushing ahead with a paperless financial service counter

We are operating the Postal Savings Profit Management System to accurately identify and analyze business costs of organization, products, customers and contribution margins to ensure the stable growth and balanced management of postal savings. We also receive management consulting from external specialists to improve the financial performance, transparency, and reliability of our postal savings business. We also post the results of special accounts in compliance with our postal savings soundness standards to help customers make informed decisions. We continue to improve the reliability of our postal savings service by having it audited by an external accounting firm as specified by our postal savings soundness standards and reporting the capital to risk weighted assets ratio and the calculation formula to the Financial Services Commission.

Taking steps to build an environment for fair competition

After witnessing the problems of the Comprehensive Crisis Management Guidelines in the face of the recent European sovereign-debt crisis, we came up with more effective countermeasures through employing a new benchmark index designed by integrating market risk, credit risk, and interest rate risk indicators for each financial product. In addition, we made improvements to apply differentiated regulations in accordance with the magnitude of each crisis and to increase the effectiveness of countermeasures. We are also considering the introduction of an early warning index system based on the financial stress index to ensure the safety of all deposit products.

Revision of the Comprehensive Crisis Management Guidelines

We established a step-by-step process to effectively deal with unexpected crises that may arise in operating the insurance business and successfully overcame critical situations and built a solid platform for stable management. In addition, we came up with our own procedures and methods for stress testing to accurately assess the durability of our system in the face of a crisis. We created a crisis response system designed to determine the seriousness of a critical situation (either “crisis imminent” or “crisis”) based on different indicators such as interest rates and stock indexes and to better deal with individual risks.

Seeking to advance Korea Post Insurance through the establishment of the “Risk and Crisis Management Standards for Korea Post Insurance”

Reinforcing financial soundness

Advancing low-carbon green growthReinforcing financial soundness

Networking with global research and financial institutionsWe are capitalizing upon our postal savings research network and closely cooperating with local and international public pension funds and overseas investing institutions to make informed decisions. We have reinforced our network with private research centers and global investment banks to enhance our research competence for financial management, while also focusing our resources on research and analysis of credit and overseas markets in order to more effectively respond to market volatility. In addition, we hosted an investment forum attended by over 200 local and international organizations in an aim to more accurately assess where we stand and continue on the right path through comprehensive macroeconomic and asset market analyses.

❶ Maintain the optimum speed ❷ Avoid using the gas pedal when going downhill❸ Avoid quick acceleration and start slowly ❹ Reduce idling

❺ Keep tires inflated ❻ Have your vehicle inspected once a month❼ Stay informed for smarter, eco-friendly driving ❽ Keep the trunk clear of extra weight❾ Select an eco-friendly vehicle ❿ Never use fake gasoline

▶Ten Rules for Environmentally Responsible Driving


We initiated a set of eco-conscious projects with funds created from Green Bonus Savings Insurance in August 2011, and held a kick-off ceremony. We invested a total of 200 million KRW in Building the Green Energy Village and Banner Upcycling, contributing to advancing low-carbon green growth and sustainable management through the protection of forests, environmental conservation, and energy saving.

Undertaking eco-conscious projects for the public good in compliance with Green Post 2020

※ Kicking-off projects for environmental conservation Upcycling of used banners (transformed into eco bags)


Reinforcing our role as a state-run corporation

In response to the government’s effort to invigorate traditional markets, we have been displaying promotional materials at post offices nationwide, selling and purchasing gift certificates, and forming sisterhood ties between each post office and a nearby traditional market since 2010. Also, the

post office check card released in December comes with a money-back service, which returns up to 10 percent of the amount spent at traditional markets or mom-and-pop stores in cash to the cardholder. We will continue to develop and promote products that back government policy, such as supporting small merchants and saving energy, as a state-run corporation.

Helping to invigorate traditional open-air markets

Total amount of Onnuri Gift Certificates sold at post office counters in 2011

Total amount of Onnuri Gift Certificates purchased in 2011

Number of partner marketsKorea Post

Postal organizations

under supervision of

Korea Post

Affiliated organizations Total

27.5 billion KRW 166 million KRW

3.276 billion KRW

63 million KRW

3.506 billion KRW 226

We remain dedicated to serving people as a state-run financial institution by supporting the livelihoods of low-income families and offering scholarships and medical expenses through postal insurance plans. For instance, our micro-insurance plan Happiness of 10,000 Won attracted 107,369 policyholders, and 3,551 among them have received benefits so far.

Supporting the underprivileged through insurance plans promoting public interest

Amount of support

Number of Recipients Specifics

Scholarships for child breadwinners

380 million KRW

100

Scholarships totaling 5 million KRW and medical expenses for injuries resulting from accidents are provided through premium-free Teenagers’ Dream Insurance.

Cancer treatment expenses for the disabled

190 million KRW

300

Premium-free Disabled Pension Insurance (medical care benefits for cancer treatment) provides coverage for cancer treatment expenses. Base premiums paid by Korea Post are given when the policy matures.

Medical expenses for children of single-parent homes

240 million KRW

100

Premium-free Child Health Care Insurance provides coverage for medical expenses (hospitalization, surgery, etc.) incurred by diseases and accidents.

Medical expenses covering accidents for low-income workers

2.24 billion KRW

107,369Happiness of 10,000 Won policyholders are provided coverage for accidents for a year by paying only 10,000 KRW

Reinforcing our role as a state-run corporation Sustainable Management

※ Designing a camp for child breadwinners on Children’s Day Presenting scholarship certificates

In 2011, we held two contests targeting all post offices across the nation to collect ideas for public services tailored to local communities in a bid to develop systematic, lasting community outreach programs that encourage employees to make more significant contributions than mere one-time donations. As a result, we were able to reinforce our community outreach with community-specific, recipient-centric projects.

Public services tailored for local communities offered through the network of post offices

※ Supporting the 365 Volunteers Nationwide Love Sharing event

We have initiated the “Heat-Retaining House Wear” Campaign across the nation to save energy in wintertime. The campaign began with the viewing of a promotional video at the monthly staff assembly at post offices nationwide in December, followed by a wide range of public events including delivering house clothes to disadvantaged neighbors at the end of the year and staging street promotions. We also remained true to our commitments internally by presenting employees with house wear sets as birthday gifts and rewards.

Heat-Retaining House Wear Campaign

※ On-the-street promotion of Heat-Retaining House Wear to Save Energy Sharing Heat-Retaining, Energy-Saving House Wear event

Deposit products for low-income families (such as Happiness Keeper and Deobureo Free Installment Savings), which provide incentives for the underprivileged including those with bad credit, have been designed and released to help those in need become self-sufficient.In addition, in order to help low-income families that are often alienated from financial services stand on their own, we released the nation’s first micro-insurance entitled Happiness of 10,000 Won (non-dividend-paying) on January 4, 2010 and supported premiums worth 2.23 billion KRW for 107,369 policyholders. It has been recognized as significantly contributing to the development of Korea’s micro-finance market.

Releasing financial instruments to support low-income families

Products(release date) Targets Interest rate

(for one year)

Limits Current status

(as of late 2011)

Person Period Amount

Happiness Keeper

(June 1, 2011)

Recipients of National Basic Living

Assistance (non-attachable account)

Up to 1.0% a year

(preferential rate of 0.5%p)

- - -

3,900 accounts

520 million KRW

Deobureo Free Installment

Savings(May 31, 2011)

Low-income families (amount of income at 150% or lower of the minimum cost of

living)

6.0% a year(preferential rate

of 3%p)

One person per household

Temporarily sold until Dec.

31, 2012

9 million KRW per person

2,500 accounts

2.27 billion KRW

Deposit products for low-income families


The disabled, parentless children who are heads of their households, and recipients of National Basic Living Assistance, as well as very low-income individuals (classified as a tier above recipients of National Basic Living Assistance), people of national merit, participants of the independence movement during the Japanese Colonial Rule, and college students, are exempt from all financial service fees. They are also exempt from or receive up to 54 percent discounts for service fees charged for using the banking counter and ATMs. Discount benefits are given to families with more than one child when purchasing insurance plans; families with two children receive a 0.5 percent discount on premiums and those with three or more a 1.0 percent discount.

Exempting fees for the underprivileged Korea Post places a heavy focus on the prevention of voice phishing and engages in many activities to assist those particularly vulnerable to such crimes and those in rural communities. We continue to monitor accounts under suspicion, promptly order the suspension of payments for accounts used in crimes, release anti-phishing measures and cases through the media (more than 400 times on TV and newspapers so far), and provide guidance through the National Police Agency’s call center (112). In 2011 alone, 231 voice phishing attempts (estimated damage reaching 3.4 billion KRW) were thwarted, and voice phishing criminals were caught in three different countries including Korea.

Preventing voice phishing

2010 2011 Increase (%)

Cases Amount Cases Amount Cases Amount

Prevention

Banking counter 271 6,068 145 2,927 △46.5 △51.8

Monitoring 275 1,412 86 520 △68.7 △63.2

Total 546 7,480 231 3,447 △57.3 △53.9

Arrested criminals 2 - 3 - 50.0 -

Prevention of voice phishing (unit: million KRW)

2010 2011 Increase (%)

Cases Amount Cases Amount Cases Amount

At regional offices 928 2,171 966 1,857 4.1 △4.5

At call centers 607 2,703 465 1,426 △23.4 △47.2

Total 1,535 4,874 1,431 3,283 △6.8 △32.6

Reported damage from voice phishing (unit: million KRW)

FeesNote

Before After

Post offices

Transfer between post offices

100,000 KRW or less 800 Exempt

More than 100,000 KRW 1,000~2,000 1,000

CD/ATM

Cash withdrawal Afterhours 500 250

When withdrawing amounts of

50,000KRW or less or making

withdrawals consecutively

(500 KRW for others)Account transfer Afterhours 400 Exempt

Partner financial

institutions

Transfer to partner banks at banking counter

100,000 KRW or less 1,300 600

1 million KRW or less 2,000 1,000

More than 1 million KRW 3,500 3,000

CD/ATM

Cash withdrawal

During business hours 800 600

Afterhours 1,000 800

Account transfer

100,000 KRW or less

During business hours 800 500

Afterhours 1,200 600

More than 100,000

KRW

During business hours 1,300 750

Afterhours 1,700 1,000

Overseas money transfer

At banking counter 1,000-50,000 USD or less 10,000~28,000 10,000

Fees for each section unified

Online 1,000-50,000 USD or less 5,000~18,000 5,000

Overseas money transfer

Remittance More than 3,000-5,000 USD 8,000~10,000 8,000

Mail transferDeposit (remittance) 100,000 KRW or less 800 Exempt

Withdrawal (issuance of certificate)

100,000 (1 million) KRW or less, more than 1 million KRW 1,000~2,000 Exempt

Cashier’s check

Issuance (per check)

No financial transaction

Fixed amount 50 Exempt

Non-fixed amount 300 Exempt

Readjustment of major service fees

Reinforcing our role as a state-run corporation Sustainable Management

(unit: KRW)


Customer-centric management Enhancing management efficiency

Our customer satisfaction management training is carried out by two in-house training providers: the Knowledge Economy Officials Training Institute in charge of fostering CS specialists and the CS Postal Service Academies responsible for teaching customer service skills to employees who come into direct contact with customers. The first CS Postal Service Academy opened at the post office in Suyeong-dong, Busan in July 2001. The number rose to eight, including the one recently established at the Gangwon Regional Office in 2011, training a combined total of over 14,120 employees a year and contributing considerably to improving customer-centric service. To further strengthen the dedication of the entire staff to customer satisfaction, all post offices across the nation are providing customer satisfaction training every Wednesday, which is designated as CS Happy Day.

Reinforcing training to bolster the commitment to customer satisfaction

Number of CS Postal Service Academies in operation

Regional Office in charge Number Regional Office in charge Number

Seoul 2 Busan 1Chungcheong 1 Jeonnam 1

Gyeongbuk 1 Jeonbuk 1Gangwon 1

Customer-centric managementEnhancing management efficiency


Customer service lecturers from the Regional Offices are giving customer satisfaction lectures for local public organizations and serving as mentors, testifying to Korea Post’s pursuit of excellence in customer satisfaction management. In order to respond to suggestions and comments of customers on system improvements and more efficiently manage overall quality, we established the Integrated Management System for Customer Suggestions and Complaints.The Korea Post Customer Center was expanded to more promptly and efficiently cater to customer needs and pay closer attention to customer feedback. We also succeeded in enhancing the quality of service through the pilot operation of KP-SQI developed in 2009.

Rising as the nation’s number one public organization in customer satisfaction

Title of survey Organizer Sector 2011 Note

NCSI Korea Productivity Center Postal service 1st 1st for 10th

consecutive year

NCSI Korea Productivity Center

Parcel delivery service 1st 1st for fifth

consecutive year

KCSI KMAC Postal service 1st 1st for 13th consecutive year

EMS Performance Award UPU Service quality Gold Level 1st for fifth consecutive year

Ranking first in several customer satisfaction surveys

In 2003, we adopted the Six Sigma management technique for the first time among government organizations, achieving process improvements that led to cost reduction and an increase in work efficiency and service quality. In particular, the MBB TFT, consisting of MBBs of postal organizations under direct supervision of Korea Post and related staff members from Korea Post, was created in 2011 and has completed various tasks including “realizing Work Smart through improving postal products and services”, “raising the quality of postal service through improving the delivery service” (in the first half), and “eliciting the participation of all employees in devising measures for customer satisfaction management” (in the second half). Our efforts to adhere to Six Sigma, make improvements accordingly, and propose innovative ideas were acknowledged through winning the bronze prize for submitting proposals to the central government and the gold medal in the Outstanding Standardization Competition.

Management innovation through Six Sigma

Major patents in 2011

Status Patent (specific case)

Registered Safeguard to prevent the collapse of loaded mail items (flat palette wrapping jacket of the Andong Mail Center)

Registered Multi outlet extension cordPending Cargo box mounted on a motorcyclePending Delivery-zone-specific mail containersPending Voice information system for mail classificationPending Energy-saving controller for the vending machine for packagingPending Hand cranePending Bearing extract machine and bearing extract jigPending Automatic palette connector

Integrated quality management efforts and results

Six Sigma On-site improvement

activities

Proposal submission

to the central government

Patents OthersResults Improvement

specialists

Strategic tasks 40MBB tasks 3Financial outcome 9.3 billion KRW

MBB 9BB 6GB 95

28 model post offices 264 themed tasks

2 bronze prize winners and 2 participation prize winners

2 registered

and 31 pending

- Winning five prizes, including the gold medal, in the Outstanding Standardization Competition

- Publishing promotional material entitled “New Changes and Challenges of Korea Post”

※ Patents applied for outstanding cases of quality management activities and utilized as Korea Post’s intellectual properties


- Overview of the post office building in KidZania

• Occupies about 15 square meters

• Facilities installed to blend in with the environment of KidZania

(Exterior) Signage with the post office CI (Interior) Reception counter, postmark table, TV for promotional videos,

facilities enabling kids to experience door-to-door parcel and mail delivery services

- Opening ceremony for the post office in KidZania (Dec. 29, 2011)

Postal culture brings communities closer together

◇ Renaming the Korea Stamp World as the Korea Postage Stamp Museum and designing the logo

◇ Building the postal culture experience hall◇ Installing Slow-Delivery Postboxes across

the nation◇ Designing the logo and slogan dedicated

to the promotion of postal culture◇ Utilizing Korea’s first communications

minister in promoting postal culture◇ Post ing the p ic tu re o f the Posta l

Directorate at post offices◇ Concluding an MOU with pert inent

government organizations◇ Korea Post Building recognized as an ACI

building◇ Designing the brand identity for the notice

of postage rates and postal supplies◇ Operating the commemorative stamp

shop in house ◇ Publishing a collection of essays on postal

culture◇ Designing and releasing branded products

to fortify brand power

Postal culture enriches the lives of people

◇ Opening the Postal Service Museum in the metropolitan area

◇ Creating the City of Postal Culture◇ Building a more friendly image through

installing statues of postal workers◇ Designing the brand identity for the postal

worker uniform◇ Upgrading and promoting the Song of

Postal Service◇ Re-designating Postal Service Day or

designating Mail Day◇ Operating the Cyber Hall of Fame

Postal culture highlights the leadership position of Korea’s postal service

◇ Establishing the Postal Service Promotion Agency

◇ Opening the Postal Culture Café at post offices

◇ Establishing a broadcasting station at post offices

◇ Naming each post office after a significant event or figure in postal history

◇ Operating programs for promoting postal history, such as a trip to important sites

◇ Carving or painting on the walls of post offices to highlight postal culture

< About KidZania >KidZania is a replica of a real city with over 51 buildings that offer children the chance to experience a wide range of professions, helping them learn the value of labor, foster creativity and leadership, and enrich their minds.

To encourage all people to take greater interest in postage stamps, we reopened the Korea Stamp World located on the second basement floor of the Seoul Central Post Office on November 7, 2008. The name was changed to the Korea Postage Stamp Museum in December 2011. Since then, the museum has been visited and explored by many as Korea Post’s key cultural operation. It houses a great collection of exhibits that change by season and cater to different needs of museum-goers, including students wishing to learn about Korea’s postal history, tourists from abroad seeking to experience Korean culture, and stamp collectors aiming to expand their philatelic knowledge. Some of the museum’s major activities have included the staging of the Newly Released Stamp Exhibition in 2011, the opening of the Pororo stamp collection photo zone in February, and the organization of “Shared Global Village”, an exhibition co-planned with college student ambassadors promoting postal culture, in July.In addition, the museum contributed to highlighting the cultural significance and raising awareness of stamps through building an effective publicity process in association with the Korea Tourism Organization. It is making continued progress as a center for public education and entertainment that fosters an understanding of Korea’s postal service.

Korea Postage Stamp Museum – Korea Post’s key cultural operation

We have established the 10-year plan for the promotion of postal culture to come up with a greater variety of communication channels to give wider publicity to the history of stamps and postal service and thereby boost the morale of all Korea Post employees.

Establishment of the 10-year plan for the promotion of postal culture

※ Definition of postal culture: Postal culture encompasses the value created by all efforts and activities aimed at highlighting the significance of postal service in everyday life by making use of stamps, mail, post offices, prominent figures, and other elements that make up its history.

We opened the post office building in KidZania, a miniature city with diverse building replicas where kids can learn about real-world jobs in a fun, entertaining fashion, to provide them the chance to gain a better understanding of the postal service and to partake in postal culture.

Operating the post office in KidZania

※ KidZania: Kid + Z (link) + ania (land)

Post Office

Promoting postal culture

Laying a solid foundation for postal culture (2011-2012)

Dispersing and developing postal culture

(2013-2014)

Strengthening and sharing postal culture (2015-2020)


Promoting postal culture

Encouraging more customers to explore postal culture① Opening the KidZania post office to help kids gain

hands-on experience of postal service② Installing the Slow-Delivery Postbox across the nation③ Concluding an MOU with pert inent government

organizations④ Designing and releasing branded products (such as

character products) to fortify brand power⑤ Opening the Postal Culture Café at post offices⑥ Carving or painting on the walls of post offices⑦ Korea Post Bui ld ing recognized as an ACI

(architectural corporate identity) building⑧ Operating the commemorative stamp shop in house

Strengthening postal culture① Designing and utilizing the logo and slogan dedicated to the

promotion of postal culture② Establishing the Postal Service Promotion Agency③ Establishing a broadcasting station at post offices④ Reinforcing the brand identity for the notice of postage rates⑤ Designing the brand identity for off ice suppl ies and

promotional materials

Enhancing the pride of postal staff① Building a more friendly image through installing

statues of postal workers② Designing the brand identity for the postal worker

uniform③ Upgrading and promoting the Song of Postal Service④ Re-designating Postal Service Day or designating Mail

Day⑤ Publishing a collection of essays on postal culture⑥ Operating the Cyber Hall of Fame

Enriching the history and culture of Korea Post

① Renaming the Korea Stamp World as the Korea Postage Stamp Museum and designing the logo

② Utilizing Korea’s first communications minister Hong Yeong-sik, one of the great names in postal history, in promoting postal culture

③ Posting the picture of the Postal Directorate at post offices④ Opening the Postal Service Museum in the metropolitan area⑤ Naming each post office after a significant event or figure in

postal history⑥ Creating the City of Postal Culture⑦ Operating programs for promoting postal history, such as a

trip to important sites

Postal Culture

통계자료

Statement of Position 58

Revenues 60

Postal statistics 62

Postal savings and insurance 63

Issuance of cashier’s check 63

Types of insurance plans available 64

Statistics



Special account for postal service

Special account for postal savings

Special account for postal insurance

Item 2010 2011 Increase from previous year (%)

Assets

Current assets 2,735 3,357 22.7

Investment assets 959 1,111 15.8

General tangible assets 41,668 57,614 38.2

Intangible assets 79 51 △35.1

Other non-current assets 366 353 △3.4

Total assets 45,807 62,486 36.4

Liabilities

Current liabilities 11,020 3,038 △72.4

Long-term borrowings 393 88 △77.5

Long-term estimated liabilities 216 248 14.3

Other non-current liabilities 0 10,039 100.0

Total liabilities 11,629 13,413 15.3

Net assets

Basic net assets 64 64 0.0

Reserves and retained earnings 34,113 32,559 △4.6

Net asset adjustment 0 16,449 100.0

Total net assets 34,177 49,072 43.5

Total liabilities and net assets 45,807 62,486 36.4


Assets

Current assets 317,089 94,200 △71.3

Investment assets 0 261,602 100.0

Ordinary tangible assets 1,185 1,274 7.5

Total assets 318,274 357,076 12.2

Liabilities

Current liabilities 270,459 4,512 △98.3

Long-term estimated liabilities 24,817 329,461 1227.5


Net assets

Reserves and retained earnings 10,447 14,368 37.5

Net asset adjustment 12,551 8,735 △30.4




Assets

Current assets 329,180 399,558 21.3

Investment assets 213,792 242,151 13.2

General tangible assets 10,382 14,453 39.2

Intangible assets 325 226 △30.6

Other non-current assets 106 10,144 8570.9

Total assets 553,785 666,532 20.3

Liabilities

Current liabilities 517,945 630,098 21.6

Long-term borrowings 706 378 △46.5

Long-term estimated liabilities 1 1 44.7


Net assets

Reserves and retained earnings 22,956 24,279 5.7

Net asset adjustment 12,177 11,776 △3.3



Statement of Position




Total liabilities and net assets

'10

'11

Liabilities 11,629

Liabilities 13,413

Net assets 34,177 Assets 45,807

Assets 553,785

Assets 318,274

Net assets 49,072 Assets 62,486

Assets 666,532

Assets 357,076

+36.4%



'10

'11

Liabilities 518.652

Liabilities 630,477Net assets 36,055

Net assets 35,133

+20.3%



'10

'11

+12.2%Special account for postal insurance

Liabilities 295,276

Liabilities 333,973Net assets 23,103

Net assets 22,998


Revenues and expenses

Revenues

Expenses

Account 2007 2008 2009 2010 2011 Increase from previous year (%)

Revenues

Special account for telecommunication

business52,757

Postal service 32,726 Postal

service 32,601 Postal service 33,589 Postal

service 35,089

1.7Postal savings 24,990 Postal

savings 33,080 Postal savings 36,046 Postal

savings 35,883

Total 57,716 Total 65,681 Total 69,635 Total 70,972Special account for

Postal Insurance 5,964 5,774 5,704 6,151 7,079 15.1

Expenses

Special account for telecommunication

business47,495

Postal service 30,633 Postal

service 31,700 Postal service 32,768 Postal

service 35,021

2.8Postal savings 20,819 Postal

savings 24,266 Postal savings 22,679 Postal

savings 21,981

Total 51,452 Total 55,966 Total 55,447 Total 57,002

Special account for Postal Insurance 5,083 5,426 5,441 5,978 6,986 6.9




Account Item Performance


Profit and loss

Income from operations 24,976Government property rent 264

Miscellaneous income 80Transferred income 6,251

Balance brought forward from the previous year 469

Profit and loss total 32,040

Capital


Income from government property sales 74Government internal income and others 2,923

Capital total 3,049

Subtotal 35,089


Profit and loss

Income from financial business 22,511Miscellaneous income 4

Government internal income and others 612Balance brought forward from the

previous year 12,611


Capital


Income from government property sales 1Government internal income and others 134

Capital total 145

Subtotal 35,883

Special account for Postal Insurance

Profit and loss

Add-on insurance fee 7,075Miscellaneous income 4


Subtotal 7,079

Total revenue 78,051

Account Item Performance


Profit and loss

Enhancing postal service competitiveness 7,780Supporting business management 4,931Supporting administrative affairs 15,008

Transactions between account funds 1,339Other account transfers 2,924


Capital

Enhancing postal service competitiveness 282Supporting business management 2,244

Transactions between account funds 513

Capital total 3,039

Subtotal 35,021


Profit and loss

Stimulating the growth of postal savings 17,972Supporting administrative affairs 2

Other account transfers 3,295Transactions between account funds 445

Transactions between accounts 134


CapitalStimulating the growth of postal savings 133

Capital total 133

Subtotal 21,981

Special account for postal insurance

Profit and loss

Strengthening postal insurance service 3,257Supporting administrative affairs 1

Other account transfers 3,513Transactions between account funds 215


Subtotal 6,986

Total expenses 63,988

Revenues


Postal statistics (unit: thousand mail items)

2007 2008 2009 2010 2011Increase from previous year

(%)

Domestic mail

Ordinary mail 4,548,433 4,450,559 4,368,963 4,400,464 4,335,868 -1.5

Special mail 269,695 289,834 303,973 296,305 292,025 -1.4

Ordinary parcel 3,244 2,773 2,250 2,159 1,991 -7.8

Registered parcel 107,741 126,633 141,389 153,014 167,328 9.4

International mail

Ordinary mail 7,697 7,637 7,759 9,641 9,527 -1.2

Special mail 538 536 701 1,188 2,108 77.5

EMS 4,499 5,037 5,969 6,229 6,923 11.1

Parcel 493 491 547 555 565 1.8

Total 4,942,350 4,883,500 4,831,552 4,869,555 4,816,335 -1.1

Average number of mail items per person 100.3 99.1 99.1 97.8 96.8

Average number of mail items per day (million) 19.7 19.8 18.9 19.3 19.3

Postal money orders (unit: thousand orders, hundred million KRW)

2007 2008 2009 2010 2011Number of orders Amount Number

of orders Amount Number of orders Amount Number

of orders Amount Number of orders Amount

Regular money orders 355 360 286 223 268 169 287 162 276 150

Online money orders 339 605 306 598 284 579 261 546 234 496Delivery of money gifts for special occasions

1,903 1,077 1,730 1,030 1,536 955 1,578 1,023 1,537 1,027

Gift cards 2 1 6 4 3.2 2.3 3.6 2.5 2.4 1.7

Total 2,599 2,043 2,328 1,855 2,091.2 1,705.3 2,129.6 1,733.5 2,049.4 1,674.7

Number of postal savings accounts (unit: thousand accounts, thousand persons)

2007 2008 2009 2010 2011

Number of accounts

Accounts held 20,765 20,795 20,949 20,020 20,226

Active accounts (excluding all dormant

accounts)15,657 16,235 16,764 16,997 17,539

Active customers 11,423 11,699 12,108 12,157 12,326

Number of postal facilities (unit: thousand mail items)

2007 2008 2009 2010 2011

Postboxes 25,547 23,761 23,057 22,051 21,055

PO boxes 27,968 27,657 28,228 27,803 25,684

Automobiles 3,037 3,441 3,750 3,809 3,816

Motorcycles 14,243 14,212 14,084 14,112 14,186

Postal delivery vehicles 40,164 45,021 47,334 51,702 53,400

Trolleys 6,698 6,576 6,077 4,877 4,711

Cancelling machines 244 249 241 235 186

Automatic cancelling machines for postage paid items 434 407 419 406 359

Automatic vending machines 3,766 3,747 3,977 3,964 3,783

Products

Demand deposits Installment savings Time deposits Others

• Junior Preferential Savings• Youth Pension Account (Dec. 16, 2011)• 2040+α Savings Deposit• Sound Corporations MMDA

Account (May 3, 2011)• ePostbank Savings• Happiness Keeper

Account(Jun. 1, 2011)• Ordinary Deposit• Savings Deposit• Deumbbuk Prime Savings• Well-Being Prime Savings

• Junior Preferential Free Installment Savings

• 2040+α Free Installment Savings• Love-Thy-Neighbor Free

Installment Savings• Deobureo Free Installment

Savings (May 31, 2011)• Post Office New Spring Free

Installment Savings• Loving Family (Periodical and

Free) Installment Savings• Periodical Installment Savings• Household Preferential

Installment Savings• Tax Credit Savings for Housing

• Junior Preferential Time Deposit• Silver Preferential Time Deposit• Silver Preferential Pension

Deposit• 2040+α Time Deposit• Champion Time Deposit• ePostbank Time Deposit

(Oct. 7, 2009)• Post Office S Banking Time

Deposit (Mar. 29, 2011-Nov. 1, 2011)• Love-Thy-Neighbor Time

Deposit• Green Bonus Time Deposit• Time Deposit• Equity-linked Time Deposit

• Repurchase Agreement Deposit

• Government Deposit

Ten types Nine types Eleven types Two types

Types of deposit products (Names in bold type are products newly released in 2011)

International Remittances (International Remittances + SWFT) (unit: thousand cases, hundred million

2007 2008 2009 2010 2011Number of cases Amount Number

of cases Amount Number of cases Amount Number

of cases Amount Number of cases Amount

Outgoing 43 279 53 356 59 441 62 439 59 509

Incoming 17 267 19 466 15 350 14 284 14 313

Total 60 546 72 822 74 791 76 723 73 822

Postal savings and insurance (unit: billion KRW)

47,154

44,151

40,190

49,246

56,560

22,699

26,584

21,066

29,803

33,979

Issuance of cashier’s check (unit: thousand checks, hundred million KRW)

18.19517,103

19,436

13,558

11,048

308,247

355,037

343,835

259.213

236,687

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011


Growth of postal insurance by year (unit: thousand cases, hundred million KRW)

2007 2008 2009 2010 2011

Number of new contracts 1,611 1,717 1,535 2,033 1,788

New contract amount 278,835 268,407 238,686 271,664 294,707

Number of contracts held 10,126 10,475 10,645 11,605 12,218

Contract amount held 1,255,209 1,279,020 1,298,657 1,425,741 1,505,614

Import insurance bill

Guaranteed insurance 28,603 29,442 29,419 29,781 30,693

Savings insurance 29,096 27,423 46,134 39,689 43,409

Total 57,699 56,865 75,553 69,470 74,102

Insurance money paid 43,311 47,137 44,700 50,944 43,180

Types of insurance plans available (as of Dec. 2011)Plans Marketed from

Guaranteed

Post Office Individually Paid Medical Expenses (non-dividend-

paying)

Medical care benefits for injuries and diseases Oct. 26, 2009

Medical care benefits for diseases

Post Office Big Disease Big Protection Jan. 3, 2011

Post Office Health Clinic (non-dividend-paying) Jan. 3, 2011

Post Office Hanaro OK (non-dividend-paying) Mar. 25, 2011

Post Office Seat Belt Insurance Apr. 15, 2008

Child Health Care Insurance (non-dividend-paying) Guaranteed Apr. 30, 2010

Ever Rich Accident Insurance Oct. 5, 2005

Hi Low Term Insurance Sep. 15, 2004

Lifelong Guaranteed Cancer Insurance Apr. 16, 2010

Disabled Pension Insurance (non-dividend-paying)

Type 1 (disability benefits)Sep. 10, 2001Type 2 (medical care benefits for

cancer treatment)Type 3 (medical care benefits for

injuries) Apr. 20, 2006

Happiness of 10,000 Won (non-dividend-paying) Jan. 4, 2010

Savings

Green Bonus Savings Insurance (non-dividend-paying)

Standard Oct. 19, 2009

Income replacement benefits Dec. 1, 2010

Ever Rich Welfare Insurance (non-dividend-paying)

StandardJan. 5, 2010

Income replacement benefits

Power Installment Insurance (non-dividend-paying) Jan. 5, 2010

Child Health Care Insurance (non-dividend-paying) Savings Apr. 30, 2010

Essence Switch Insurance (non-dividend-paying) Jan. 5, 2010 Long-term Housing Savings Insurance (non-dividend-paying) Jan. 5, 2010

Pension

Postal Pension InsuranceType 1 (standard pension) Dec. 1, 2003Type 2 (pension savings) Dec. 8, 2006

Plus Pension InsuranceType 1 (standard pension)

Nov. 1, 2007Type 2 (pension savings)

Postal Instant Pension Insurance (non-dividend-paying) Sep. 23, 2011

Number of staff (based on prescribed number) (unit: persons)

Total

Permanent government officialsSpecial

post office staff

Security guards

Non-permanent

Contract posts

Regular posts

Technical posts

Specially designated

postsSubtotal

Non-fixed-term contract

Fixed-term contract Total

Total 44,484 1 10,273 21,004 13 31,291 4,063 41 3,894 5,195 9,089

Korea Post 351 1 332 5 9 347 3 1 4

Offices under direct control 579 480 70 2 552 5 9 13 22

Regional Offices 43,554 9,461 20,929 2 30,392 4,063 36 3,882 5,181 9,063

Post Office Customer Service CharterThe entire staff of Korea Post will constantly bear in mind that our ultimate goal is to achieve

customer satisfaction through every aspect of our operation to win the trust and affection of customers. We will also remain dedicated to improving our service to cater to the individual needs

of customers. To this end, we will make sure to adhere to the following:

We will treat each customer with the utmost respect and hospitality.

We will handle each mail with care and collect and deliver them rapidly, accurately, and safely.

We will provide financial services that are easily accessible, convenient, and reliable at all times.

We will deal with customer complaints promptly and fairly, and take appropriate follow-up measures without delay.

We will remain attentive and sensitive to customer comments and opinions and make customer-centric improvements to our systems and service.

We will establish stringent service performance standards and strictly

abide by them to fulfill the commitments listed above.


report 2011 korea post annual report - serving the postal...

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