By Yoon Ja-young
Staff Reporter
Korea Life Insurance started business in Vietnam Wednesday, the first Korean life insurer to do so.
The insurer held a launching ceremony for Korea Life Insurance Vietnam at the Daewoo Hotel in Hanoi, March 31, with some 200 participants.
``The insurance industry in Vietnam has recorded over 10 percent growth each year. The market has huge growth potential, with the population aged under 30 making 60 percent of the total,'' said Korea Life Insurance CEO & Vice Chairman Shin Eun-chul.
Korea Life Insurance Vietnam is the first overseas business entirely owned by a Korean life insurer.
The launch came three years and three months after the insurer opened a representative office in Hanoi in December 2005. It has started the business remarkably quickly considering it generally took five years for global insurance players from the United States and the United Kingdom to start their businesses after getting government permission.
Korea Life Insurance said that the Vietnamese regulator highly evaluated its size and financial soundness. ``The contribution of Korean firms to the Vietnamese economy also helped,'' a spokesman of the Korea Life Insurance said.
Korean businesses have been actively investing in Vietnam, which is 1.5 times the size of the Korean Peninsula and has a population of 85 million, to exploit its abundant natural resources and continuing growth following its open market policy. Despite the global financial crisis, it has been stabilizing since December thanks to the strong financial and stimulus policies of the government. It's expected to record 5 to 7 percent economic growth this year on the continuing inflow of foreign direct investment (FDI).
The future of the insurance market is bright in Vietnam. Global insurance market analysts have picked Vietnam as one of the most promising emerging markets in the world. It marked 12 percent year-on-year growth in terms of insurance premium income last year despite the global financial market turmoil, on increasing sales of universal products and aggressive marketing by latecomers in the market.
Korea Life Insurance Vietnam has $60 million in paid-in capital and is headquartered in Ho Chi Minh City, the commercial core of the country, with a population of 10 million. It opened three branches ― two in Ho Chi Minh and one in Hanoi, the capital city, with 4.5 million people.
The insurer has around 300 salespeople registered, all of whom are 22 or older and have high school degrees or higher education. It also hired professionals for key posts, including chief operation officer (COO) and chief financial officer (CFO), the head actuary, and operation manager.
``As we led the life insurance industry in Korea over the past 60 years, we will embark on great challenges in Vietnam with the best products and customer services, making great contributions to the development of the insurance industry,'' Shin added.
Korea Life Insurance Vietnam targets households in Hanoi and Ho Chi Minh City in the top 20 percent income bracket, or making over $2,100 a year. It plans to focus on endowment insurance and education insurance products.
The insurer aims at securing a five percent market share by 2013, increasing the number of salespeople to 6,700 and pulling up the annual insurance premium income to $35 million. It plans to expand sales channels to other parts of the country, including Da Nang and Haiphong. Currently, Prudential, a U.K. insurer, and Bao Viet are leaders in the market, followed by Manulife of Canada and AIG of the United States. The market is estimated to grow around 10 percent this year.