Insurance Companies' 'Shin Nambang Expansion'... Unstoppable Despite COVID-19 Impact

[Asia Economy Reporter Oh Hyung-gil] Despite the COVID-19 situation, insurance companies are accelerating their entry into the New Southern Market.

According to the insurance industry on the 21st, Shinhan Life Insurance has obtained approval from the Vietnamese Ministry of Finance to establish a local life insurance company. Shinhan Life Vietnam plans to undergo a one-year preparation period before officially launching in 2022.

Shinhan Life secured financial stability by establishing a business model based on the synergy of Shinhan Financial Group and depositing capital of 100 million USD (approximately 110 billion KRW) last December.

Kyobo Life Insurance is pushing to establish a joint venture with a local insurer in Myanmar this year. They have completed setting up a liaison office in Yangon, Myanmar, and plan to negotiate with local business partners regarding the establishment of the corporation.

Although Myanmar’s life insurance market penetration rate (premium income relative to GDP) is low at 0.01%, its average economic growth rate over the past three years has reached about 6.2%, with continuous economic growth expected in the future.

Insurance companies have been focusing their efforts on entering the Southeast Asian market. Samsung Life Insurance established joint ventures in Thailand (Thai Samsung Life Insurance Co., Ltd.) and China (Zhongyin Samsung Acquisition Insurance Co., Ltd.). They also operate liaison offices and investment corporations in China and Vietnam respectively.

Hanwha Life Insurance was the first domestic life insurer to start insurance operations in Vietnam in April 2009. Following the establishment of the China joint venture life insurer Zhonghan Acquisition in December 2012, they also began operations of their Indonesian corporation in October 2013.

Hyundai Marine & Fire Insurance established corporations in China and Vietnam. They also have offices in Ho Chi Minh City and Hanoi in Vietnam, Beijing and Shanghai in China, and India. Additionally, they set up a reinsurance brokerage in Singapore.

DB Insurance secured the largest shareholder status of PTI (Post Office Insurance), the fourth largest non-life insurer in Vietnam, through equity investment. They also obtained approval to open a liaison office in Myanmar, the first among domestic non-life insurers, and have opened a local liaison office there.