Samsung to Start Auto Insurance Biz. in China
By Yoon Ja-young
Staff Reporter
Samsung Fire & Marine Insurance will launch an auto insurance business in China this year, the company said Wednesday.
``First there will be a pilot test. If it proves to be successful then we will expand the business there,'' a Samsung spokesman said.
He added that it would sell auto insurance to Korean residents in Shanghai first, and expand to Chinese customers later.
The country's biggest non-life insurance company has been eyeing the Chinese market over the past few years.
China is one of the most promising markets for global insurers ― car sales totaled 12.3 million between January and November last year, up 42.4 percent from the previous year. It is close to the total number of total cars registered in Korea ― 17.33 million as of December last year.
Samsung is not the first Korean auto insurance player in China. Hyundai Marine & Fire Insurance has been selling auto insurance there since 2008, in cooperation with Hyundai and Kia Motors. Samsung, meanwhile, has been selling corporate insurance products in Shanghai and a number of other cities since its advance into China in 2005, but auto insurance products were not included on its sales list.
The advancement into the Chinese market is part of Samsung's globalization strategy. The company has focused on expanding its businesses into overseas markets to make a leap forward from being the country's top insurer to becoming a truly global player. The insurer aims to rise into the global top 20 by 2012, and crack the top 10 by 2020.
Its CEO Chi Dae-sub said at his inauguration in May 2008 that the non-life insurance businesses can't survive by focusing only on the domestic market.
An insurance market analyst in Seoul said that the domestic auto insurance market is not attractive at all for insurers, due to its high loss ratio and huge operating cost. He added that big companies like Samsung would have no incentive to increase their market share here.
``It is true that the market here has entered a phase of stagnation,'' the Samsung spokesman said. He added, however, that Samsung wants to maintain a certain level of market share.