By Kang Seung-woo
The Korean life insurance segment is thought to be overflowing with 23 entities struggling to gain market share.
Consequently, insurers naturally feel the need to go overseas as a sustainable growth engine.
This is not so for newly-born ACE Life Korea and its CEO Brian Greenberg. It is the other way around and for them Korea is still the land of opportunities.
“Samsung Life, Kyobo Life and Korea Life are big organizations, so a 10 percent growth for them is a big number, but we are a small company. Compared to them, a 30 percent or 40 percent growth is not a big number for us. So I can get to a size and it makes sense for me,” the London native said in an interview with The Korea Times.
“Asian population gives a different product opportunity and you also see some more breakups of family. With that breakup of family, the family no longer lives together with a lot more singles and a lot more childless couples.
“Therefore, you have more niche development and more demands coming through. (That is why) I believe there are many opportunities in the Korean market.”
ACE Limited, the Swiss-incorporated parent company of the ACE Group, launched its life insurance unit in Korea on Feb. 1 this year after completing its acquisition of New York Life’s Korea operations for approximately $75 million in cash in efforts to expand its franchise in North Asia. The ACE Group is one of the world’s largest providers of insurance and reinsurance with $82 billion in assets.
While ACE Group was trying to acquire New York Life Korea, the unit of the U.S.-based insurer failed to show impressive numbers here.
But for ACE Life, it was also an opportunity to tap into the Korean market.
“ACE Group has a non-life company in Korea and we wanted to expand our presence. We have been searching for a life insurance license for many years. But due to the government’s policy not to give a full life insurance license, we couldn’t get one,” he said.
“Just in time, New York Life decided to leave the market and that became an opportunity for us to get a license.
By taking advantage of the salespeople as a stepping stone the CEO is planning to maintain its niche. There is also a plan to expand the agency force to between 3,000 and 5,000 agents over the next five years.
“Face-to-face is, we still believe, the primary distribution channel for Korea and Asia. As a group, we support agency. We focus on having our agency feel confident about the company and have our customers confident (about the company),” he said.
According to him, New York Life is well known as a professional agency.
ACE focuses on a large agent pool, but it still believes that there are other things to consider.
“We are aware that you cannot be monoline, particularly in a country like Korea. The trouble with monoline is if an economic situation is changing, something will go down and something will go up. If you have a business strategy by multiple channels, then you’ve got a portfolio to manage,” he said.
“The other thing is if you compare to 30 years ago, the country has moved on a great deal the same as many others, so people don’t always want to deal with business in one way.
“You see any businesses get multiple channels such as store, online, television and it is the same as insurance.”
Along with salespeople, ACE is on the verge of starting offering bancassurance products, while other channels are in the offing.
“We will start a bancassurance channel soon. We recruited teams and talked to potential partners. In addition, we are just about to launch a direct marketing and a telemarketing channels by early next year,” he said.
New York Life Korea put up poor numbers in evaluations by the Financial Supervisory Service (FSS) and since the acquisition in February, Greenberg has made efforts to turn the startup company around.
“The (poor) data was historical. I have strong expectation when next March comes around, you will see a different picture. We will not go from 22nd to 1st. That is not going to happen, but I am very strongly working to change that,” he said. “When we come around to the next report, we will have moved up the rankings.”
Greenberg said: “We believe this is a good market and ACE will make a sustainable good business. We already have a successful operation here, so we wanted to expand properly. That is the point.”