ING confirms Korean commitment

CEO of Korean unit vows to exploit rapid growth of local insurance market

By Kang Seung-woo

Since the global financial crisis in late 2008, foreign-based companies in Korea have taken some hard knocks.

And life insurers operating away from home did not betray the trend, with some hard-hit players’ future here in question.

However, the head of ING Life Korea said that exiting Korea is not on the cards and the firm is exploring options to advance in the local market.

“I think the global financial crisis affected all foreign companies, but ING has remained very strong throughout it and our sales this year have been exceptionally strong,” ING Life Korea CEO John Wylie said in an interview with The Korea Times.

“I cannot talk for any other company (about leaving the Korean market), but for ING, we like the market, people and the business, so we have no intention (of it).

Behind the more than 160 year history of the Netherlands-based ING Group in the insurance sector, ING Life Korea, founded in 1989, has established itself as the fourth biggest life insurer in the market, and the leading foreign player. Its market share stands at more than 5 percent for the fifth straight fiscal year, the lone player to do so among foreign entities during the period.

“People do value our risk management knowledge because we, part of ING Group, have been in insurance for more than 160 years. It is a very long history,” Wylie said.

According to the insurance industry, the company is also known for the most professional advisers, or financial consultants.

The market share of nine foreign life insurance companies, excluding Woori Aviva and Hana HSBC, both of which were established in 2008, has been stable, hovering over the 20 percent mark since 2006, when it broke the level for the first time.

Despite the stabilization, the total premiums from the nine foreign players fell short of that of industry-leading Samsung Life Insurance last year at 16.80 trillion won ($15.96 billion) compared to 21.24 trillion won.

“First of all, Samsung Life is a lot older and its asset size and premium size are a lot bigger. Strong local players in every market usually have a strong position. They have a historical advantage and it is also a perception advantage with locals helping, favoring and supporting locals. It is a natural advantage,” he said.

However, the Australian CEO, who also worked in Poland, Hong Kong and Taiwan before taking the helm in Korea last year, is seeing a bright side in foreign life insurers’ operations in Korea.

“In terms of the market, we, foreign companies, have maintained the market share, but I think Samsung has a declining market share. So, I think we are catching up, but it will take a long time. Foreign companies have quite a sizeable market share.

“Korea is a very competitive market, but there is no special barrier to prevent foreign players from succeeding. I think that we have done well and will continue to grow the business, convincing the market and people to invest in and take ING policies.” According to Wylie, ING Korea has 1.35 million policy holders.

“We have our advantages and we keep expanding our market share.”

ING has evolved into the nation’s No. 4 overall life insurer on the back of its agent force, which he say is the main and core distribution channel in doing business in Korea. Wylie added that tied agency is the largest distribution channel with about 97 percent, with bancasurance at just 3 percent.

Along with the expansion of salespeople, ING has set its sights on boosting other channel, too.

“First of all, we can improve our tied agency, even though we are doing exceptionally well with it. We might have some progress already,” he noted

“In addition, we are looking at other channels. We can certainly do more on bancasurance area and we are working on that. We have been looking at general agency (GA) area, one that few companies work on”

ING plays up to its billing as one of the leading players off the field.

As part of efforts to return profits to society and increase its presence here, ING has stepped up efforts to beef up its corporate social responsibility (CSR) activities, which are based on long-term and systematic plans, under the title of Orange Day.

“The main thing is that business realizes support for communities and we try to focus on participating in them with different organizations and people.”

ING encourages its executives and employees to work with underprivileged kids and communities, while bringing communities programs to plant trees with the children.

As of the end of the first half this year, about 640 financial consultants in ING have been involved in different ways, helping communities and that number is expected to grow to 1,500 by the end of this year, roughly one-fifth of the entire agency workforce.