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|South Korean insurers exploit big growth potential, illustration photo|
Shinhan Life – the life insurer of South Korean behemoth Shinhan Group – made forays into Vietnam’s burgeoning insurance market earlier this month following a 9-month pre-launch effort.
According to Lee Eui Chul, CEO of Shinhan Life Vietnam, the firm will primarily roll out its services via the bancassurance channel in the first year of operation and will place a strong emphasis on expanding sales channels via telemarketing and digital marketing.
“We anticipate that digitally-driven distribution channels will be the primary drivers of significant development going forward. Furthermore, a business concept must constantly be validated in new markets. That’s why we plan to test the waters in order to formulate a viable blueprint,” Chul said. “We have devised a strategic approach based on our parent company’s successes and expertise learned in the South Korean market, and we believe we can rise to the challenge.”
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In addition to savings or investment packages, the company concentrates on insurance solutions that provide an extra layer of protection.
“Rather than attempting to compete with well-established brands in Vietnam’s market, we will go forward on our own terms, building on the assets we already possess. We acknowledge that Vietnamese and South Koreans share several major commonalities, including a strong desire and substantial investment in their children’s future, particularly in health and education,” he told VIR.
According to Vietnam’s Ministry of Labour, Invalids, and Social Affairs, the South Korean and Vietnamese governments reached a bilateral social insurance pact in late 2021 to protect the legitimate rights and interests of their employees.
The accord strives to eliminate the multiple social insurance issues. As a result, Vietnamese and South Korean people are only obligated to pay social insurance contributions in one country.
The agreement states that both parties will acknowledge the period of payment of social insurance premiums. The term of involvement in social insurance contributions by Vietnamese and South Korean workers is the entire amount of time they have paid into social insurance in two countries. In this way, both the Vietnam Social Insurance Fund and the Korean National Pension Fund look at how much money employees get in pensions.
Employees are fully and equally entitled to the conditions for payment associated with social insurance regimes, as stipulated by law.
From 2023 onwards, the firm intends to place emphasis on cross-selling and up-selling to existing Shinhan Group customers in a bid to expand our product offerings. Within five years, Shinhan Life could reap benefits by facilitating Vietnamese policyholders with affordable, comprehensive insurance services.
Similarly, Kyobo Life, South Korea’s third-largest insurer, announced plans in late 2021 to expand its presence in ASEAN by partnering with Bao Long Insurance and BIDV Met Life.
Pyun Jung Bum, chairman and general director of the Kyobo Organisation, said that the firm would make significant advances in investing in the healthcare and startup industries to aid Vietnam’s digital development.
On the same boat as its South Korean peers, Hanwha Life Vietnam in mid-January struck a partnership deal with Viettel Post to tap into the latter’s broad network encompassing all localities.
“This fresh deal will allow us to exploit massive growth potential in a market of over 98 million people, but only 10.5 per cent of them are covered by life insurance services,” said Dao Duy Ninh, deputy general director of Strategy Development and Distribution at Hanwha Life Vietnam.
Bancassurance is considered a crucial platform for Hanwha Life, as it inked an exclusive long-term bancassurance partnership with Vietbank last October. The insurer previously collaborated with Woori Bank, but this arrangement with Vietbank marked its formal debut into the bancassurance market.
In addition to traditional, e-commerce, and bancassurance channels, Hanwha Life Vietnam is making a name for itself by partnering with ASIANLINK, one of the most well-known agents. Mirae Asset Prevoir Life Insurance and VietABank also signed an exclusive distribution alliance to promote insurance services to the bank’s customers via a total of 97 branches and transaction offices.
Ko Young Wan, chairman and CEO of Mirae Asset Prevoir Vietnam, said that since its formal launch in September last year, the bancassurance channel has generated upbeat preliminary results.
South Korean insurers are not only committed to the life insurance sector but also expanding to the non-life landscape. In 2017, Samsung Fire & Marine Insurance acquired a 20 per cent stake in Vietnam’s PJICO – a subsidiary of Petrolimex. Hyundai Marine & Fire Insurance became the second-largest stakeholder of VietinBank Insurance by holding 25 per cent ownership in 2018.