By Yoon Ja-young
Staff Reporter
This was a tough year for life insurance companies ― some global insurance giants faltered amid the financial crisis.
Korea Life Insurance, however, has been faring well. Some expected a contraction, but its earnings for the first half of this year marked 162.1 billion won, nearly doubling from a year ago. Its total assets breached 55 trillion won, and insurance premium income surpassed 5 trillion won. Everything turned out better than expected.
Success in Vietnamese Market
Few businesses look to overseas markets in times of global crisis. Korea Life
Head Office of Korea Life Insurance
Insurance, however, saw opportunity there. While many Korean players delayed plan advancing overseas, and while some even chose to close down operations, Korea Life launched its Vietnamese operation, being the first Korean life insurer in the country. It was also the first to start an insurance operation overseas with a 100-percent stake.
It has been quite successful so far. Since it started operations in April, the insurer now has around 2,000 salespeople, and the first month insurance premium income marked $1.3 million.
``Our sales performance was similar to that of a Taiwanese insurer, who advanced into the Vietnamese market a year ahead of us with 3,500 salespeople. It means we are effective,'' a spokesman at Korea Life Insurance said.
The insurer has three branches in Vietnam. It plans to open more branches in Hanoi and Dak Lak by the end of this year.
Korea Life first opened an office in Hanoi in December 2005, and started operations in the country after three years and three months. ``It takes five years on average for the U.S. or U.K. insurers to start operations after getting approval from the Vietnamese regulator. We completed it in record short time,'' the spokesman said.
He explained that the Vietnamese regulator highly evaluated Korea Life for being the first Korean insurer to advance into Vietnam. It also said "yes'' thanks to the company's assets size and soundness. Korean businesses' contribution to Vietnamese economy so far also helped Korea Life win over the regulator there.
The Vietnamese market is a highly promising for insurance businesses, marking over 10 percent growth each year, with a young population. Those aged 30 or under make up 60 percent of the total. ``As we led the development of life insurance industry in Korea during the past 60 years, we plan to contribute to the development of the insurance industry in Vietnam with good products and services,'' the spokesman said.
Love for Family
Korea Life started a ``love for family campaign'' this year, aimed at promoting values, which it hopes to link with non-savings type insurance. These products are fundamental insurance products, which pay out money for disasters, diseases or death. These products help the family survive even if the loved one leaves them.
The campaign worked. Korea Life Insurance sold around 350,000 integrated insurance products that provide wide coverage, and the ratio of non-savings type insurances makes up 50 percent of total sales.
The insurer has strengthened marketing activities especially on urban office workers and the residents of apartments. It aims at reaching over 100,000 new customers by the end of this year.
Korea Life Insurance's 20,000 financial planners, or salespeople, sent ``Thank You'' letters to their customers in handwriting instead of by computer, to comfort people with humanity amid global financial crisis.
Reaching out for Niche Market
The financial crisis changed the paradigm of insurance products as well. Variable insurances, which invest part of the insurance money into the stock market, were major sales items of companies over the past few years, but the collapse of the stock market changed the landscape.
Korea Life launched new products, which added safety measure to variable insurances. Its ``V-dex variable annuity insurance,'' for example, guarantees stable return once the investment return reaches 130 percent.
It also launched a new variable universal whole-life insurance, which allows the subscriber to switch the whole-life insurance to savings type insurances after seven years. Hence, the subscriber can get protection against death while he has income at work, and switch it to savings type insurance to use the money after retirement.
The insurer got attention by aggressively developing loan products. It linked the ``EZ-Free Loan,'' its product for office-workers, with cash management accounts (CMAs) at securities companies. The interest rate is much cheaper than that of instant cash services offered by credit card companies. They also can get the loan immediately from ATMs.
The request for the loan grew to the monthly average of 1,500 after August, from mere 10 to 20 a month before. Currently, Korea Life's loans are linked with CMAs of Hanwha, Hyundai and Eugene Securities.
Strengthen Customer Service
Korea Life strengthened customer services amid the global crisis and its Web site is full of interesting offerings.
In August, for example, it opened an online library that has a list of book recommendations, and provides audio book services and animation fairytales as well.
It also enabled customers to get their insurance subscription record of the past few years on the Internet.
Korea Life recently started an ``electric solicitation system,'' in which customers can subscribe to products with electric signatures. The system is expected to save millions of pieces of paper each year, and customers and salespeople can also save time and money.
Listing Going as Scheduled
The earnings surprise enabled Korea Life to push for the listing on the bourse as planned. The insurer aims at getting listed in the second quarter of next year, to enhance competitiveness on the global market.
``We have felt the need for listing early. It is crucial for us to hone our competitiveness and enhance corporate value,'' the spokesman said.
It already selected Daewoo Securities as lead manager, and plans to submit for preliminary screening early next year.
``When applying the price to book-value ratio of Tong Yang Life Insurance or non-life insurance companies listed on the bourse, Korea Life's value reaches between 6 to 8 trillion won,'' said Lee Seong-jae, an analyst at KB Investment & Securities.
chizpizza@koreatimes.co.kr
