By Kang Seung-woo
Korean insurance companies are aggressively gearing up to make their foray into overseas markets to expand their businesses beyond the saturated domestic market.
According to industry sources, Samsung Life Insurance has recently scaled up its overseas business team, while Korea Life Insurance is trying to advance into China.
“Due to a low birthrate and an aging society, the insurance industry in Korea is likely to enter a low-growth era,” a source told The Korea Times.
Samsung has selected Stephan Rajotte of Canada, who was the vice president for foreign operations, Tuesday, to head its newly-expanded Overseas Business Headquarters.
The insurance veteran, who worked for Sun Life in Canada and MetLife in the United States, served as president of Sun Life Financial Asia for three years before joining the nation’s biggest life insurer in September 2010.
Samsung’s first target is China.
Newly-appointed President Park Keun-hee has visited China twice and discussed ways to expand its investment with Air China Group, the partner of joint venture Samsung Air-China Life Insurance in Beijing.
It plans to set up a branch in Beijing this year, and beef up its business network into northeastern China which is closer to Korea.
Samsung Life is trying to strengthen its presence in Thailand where it has another affiliated company, Siam Samsung Life Insurance, by becoming the largest stockholder of the firm at 37.5 percent along with Saha Group.
“Samsung Life’s future depends on its overseas business, which is a new growth engine. While fortifying its business in China and Thailand, we will review additional countries to enter,” said an official of Samsung Life Insurance.
Korea Life is also increasing its pace of doing business in China following Vietnam.
Since its arrival in Vietnam in April 2009, the firm has increased the number of insurance planners from 450 to 3,600, and it has a plan to raise the number to 9,000 to garner a 7 percent market share by 2013.
In China, it will establish a joint venture with Zhejiang International Business Group this year to gain ground in Zhejiang Province, whose capital is Hangzhou and annual income per capita is more than $6,000. In December 2009, both sides reached a memorandum of understanding (MOU) to invest some 45 billion won in forming a 50-50 joint venture.
Samsung Fire and Marine Insurance, a non-life insurance affiliate of Samsung Group, plans to expand its presence in Europe by turning its London office into a subsidiary. It also plans to make inroads into Singapore by taking over a local insurer there.
If the two subsidiaries are set up, the company will be able to have a global network in China, the United States, Europe and Central and South America.
Korean Re, the nation’s No. 1 reinsurer, plans to turn its liaison office in Beijing into a branch this year and it has set its eyes on entering potential markets such as Australia, New Zealand, Western Europe and Africa
In addition, Korean Re is aiming to increase its ratio of overseas revenue from 19.3 percent, or 821 million won, in 2009 to 35 percent by 2015 and eventually 50 percent by 2020.
Dongbu Insurance will open its liaison office in Ho Chi Minh City, Vietnam in April and Hanwha General Insurance is also considering entering Vietnam with its group’s affiliate Korea Life.