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Insurance buoyant after strong growth
Korea Life Insurance was the 10th life insurance company to obtain a licence to operate in Viet Nam. As a new player in the market, general director Francis Jung Seop Hyun talks with theViet Nam News reporter Thu Giang about advantages and disadvantages in the market and future social activities.
How do you evaluate Viet Nam’s insurance market? How does it compare to the situation in South Korea in the past?
Although Viet Nam’s life-insurance market has now been through the start-up stage with galloping growth rates, the market potential remains very attractive. In fact, Viet Nam is one of the 15 most populated countries with more than 54 per cent of the population aged less than 30. Only 5 per cent of Vietnamese people have purchased life insurance, whilst this rate in South Korea is more than 90 per cent. In addition, the entry of Viet Nam into the World Trade Organisation has resulted in more effective economic reform policies and helped maintaining high growth rates of GDP and GDP per capita. Especially, taking into consideration the current global economic recession, it is a nice surprise that Viet Nam’s GDP growth in 2009 is forecast at 5 per cent.
Since our official opening on March 31st, 2009, we are very pleased that even though our sales targets are quite challenging we have been able to achieve more than 300 per cent of our YTD target. This is not only a great start for Korea Life Viet Nam but also a persuasive proof that the market potential is really huge.
The life-insurance market in Viet Nam began 50 years after South Korea. However, it took Viet Nam only about 10 years to be where South Korea was after 25 years, which means the life insurance market in Viet Nam now is similar to that in South Korea during the 1970s when most clients used life insurance as a saving vehicle for medium-and long-term goals, especially for their children’s education. Therefore, we will not only be able to offer such traditional products but also to introduce more sophisticated products that help Viet Nam quickly catch up with more mature markets.
Korea Life Insurance was the 10th life-insurance company to be licensed for operation in Viet Nam. As a new player in the market, what are the company’s competitive advantages?
Firstly, South Korea and Viet Nam have many things in common, especially our special care for family’s well-being and children’s education. People in both countries are also very hard working. I have even found many similarities between Vietnamese and Korean words. Therefore, culturally it is easier for us to understand the Vietnamese people and the local insurance market.
Secondly, because our long-term strategy is that Korea Life Viet Nam will be fully run by Vietnamese people, there are only three Koreans in our company, the other important posts are held by Vietnamese and Australian executives with extensive experience about Viet Nam’s market. Therefore, we have been able to attract a lot of experienced and talented staff and insurance agents.
Thirdly, we have conducted extensive market research to ensure that our products will offer the best protection benefits at very competitive premiums. We also foster the concept that all family members can be insured under a single insurance contract, which makes it possible for more people to be protected at minimum cost.
With regards to customer service, we will put the principle of "customers first" in action. For example, we will regularly check to ensure that our products will be sold to customers’ needs and ability to pay and that all of our processes will be transparent and our forms easy to use. Most importantly, we will especially focus on agency and staff training and development as they are our most valuable assets and that they are the key to our differentiation strategy.
Can you talk about Korea Life’s investment and business strategy in Viet Nam for the future?
With more than 60 years’ experience in life insurance, Korea Life has made great contribution to the economic development of South Korea, whilst also improving the living standards of our customers. Similarly, when investing in Viet Nam, we also aim at making considerable contribution to the economic development of Viet Nam and promoting the company’s development in the light of enhancing customer benefits.
When investing in Viet Nam, we do not aim at short-term profit but long-term growth. In fact, our ultimate goal is to build up a successful life-insurance company with Vietnamese people working for the Vietnamese people.
The life-insurance market in South Korea is quite mature with about 90 per cent of the population covered, whilst in Viet Nam it is only about 5 per cent. Can you predict when Viet Nam will approach a similar figure?
As I said earlier, the current life-insurance market in Viet Nam is similar to that in South Korea during the 1970s. However, when taking into consideration Viet Nam’s robust economic growth, foreign investment and rapid integration into the global economy, especially in terms of technology and financial services, I think it will take a much shorter time for Viet Nam to catch up with the life-insurance market in South Korea.
Can you tell us about the social activities that you have planned to implement in Viet Nam?
Korea Life has held a lot of social activities in South Korea for disadvantaged people. For one charity programme called "Korea Life’s Day of Love" that was launched in September 2004 alone, there are 148 social work groups with 30,000 volunteers, each spending at least 20 working hours per year for this programme. In addition to social works, these volunteers have made total donations of more than US$ 3.3 million to the people in need. This is why we have repeatedly received the Grand Prize for Social Responsibility awarded by the Korea Economic Times since 2005.
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