Hana HSBC Life Aims for Top 10 Within 5 Years
By Yoon Ja-young
Staff Reporter
Hana HSBC Life Insurance, a joint venture set up by Hana Financial Group and HSBC Insurance Group, was officially launched Tuesday. The insurer's CEO David Yoon and Clive Bannister, insurance group managing director of HSBC, said it aims to be rated as one of the top 10 life insurers in the country within the next five years.
``We aim at becoming one of the top 10, pulling up the insurance premium income by 10 times and the net profit by 20 times. We expect to achieve this,'' Yoon said at a press meeting held in downtown Seoul. The insurer has 882.5 billion won in assets, 231.1 billion won in insurance premium income, and 126,000 subscribers as of December 2007. HSBC Insurance Group is the world's 13th largest insurance group, serving 30 million customers in 55 countries.
Hana Financial Group and HSBC will finance 10 billion won each to complete a 20 billion won capital increase within March. ``The capital increase will pull up our solvency ratio to 240 percent, from the current 130 percent,'' Yoon said. Hana Financial Group holds a 51 percent stake in the insurer, and HSBC has 49 percent.
Bannister picked the market size, aging population, and welcoming environment for foreign investment as the reason why HSBC invested in the Korean insurance market. ``Korea is the second largest insurance life insurance market in Asia Pacific, and the seventh largest in the world,'' he said. Still, life insurance premiums take only 7 percent of the GDP, which compares with the 12 percent in other countries. He said it shows prospects that the ratio could double in Korea.
Regarding the recent withdrawal of the fourth phase in the bancassurance expansion plan by the government, Yoon said the insurer plans to increase the share of bancassurance sales to 25 percent, by expanding bancassurance channels to other banks and securities companies.
The government was scheduled to allow banks to sell non-savings-linked insurances such as whole-life insurance or critical illness insurance products and auto insurances from April 1, but fierce opposition by insurers nullified the expansion plan. Hana HSBC Life Insurance, however, depends heavily on bancassurance.
Yoon said it also plans to strengthen telemarketing channels and general agencies. Forming its own sales team is also an option, Yoon said. Customer database of Hana and HSBC is another valuable asset for the insurer.
Regarding the acquisition of Korea Exchange Bank by HSBC, Bannister said they expect to get approval from the financial regulator in the near future. It would add another bancassurance channel to the insurer, he said. HSBC announced last September that it agreed to buy a 51.2 percent stake in the country's sixth-largest lender for $6.5 billion from U.S. private equity firm Lone Star, on condition that the deal be sealed before the end of April.