Interview with Hwang Jun-hwan, Head of Hanwha Life Vietnam Corporation
"Vietnam is a land of opportunity with high growth potential"
Hwang Junhwan, Head of Hanwha Life Vietnam Branch (far left in the photo), and local employees. (Photo by Hanwha Life Vietnam Branch)
[Asia Economy Reporter Changhwan Lee] "Vietnam is a land of opportunity with great growth potential. We plan to continue expanding by launching innovative insurance products such as subscription insurance."
Hwang Junhwan, head of Hanwha Life Vietnam, said in an interview with Asia Economy on the 6th that the growth potential of the Vietnamese insurance market is immense, and he expects the company to expand its business further than it is now.
Hwang said, "Vietnam has a large young population in terms of demographic structure, and its insurance penetration rate and density are among the lowest in Asia, so the growth potential is very high. Recently, interest in insurance among Vietnamese people has increased due to COVID-19, which is also positive."
Hanwha Life mainly sells interest rate-linked savings insurance such as universal insurance and variable insurance in Vietnam. The company first entered Vietnam in 2009 and turned a profit in 2016, seven years after entry, and has increased profits every year since. While the number of branches was only three in the first year of entry, it now reaches 140 in major cities nationwide.
Hwang emphasized, "Hanwha Life Vietnam succeeded based on rapid localization. Among the 513 employees, only three, including myself, are Korean expatriates."
He praised, "When making important decisions such as sales and investments, we thoroughly reflect the opinions of locals. Locals are not only familiar with the Vietnamese insurance market and financial environment but also handle tasks more effectively when promoting sales partnerships with other companies or communicating with sales organizations."
Since his appointment as head of the Vietnam branch in January this year, he has been overcoming various difficulties together with local employees. Vietnam's insurance market is still underdeveloped, and many systems are insufficient compared to advanced countries.
For example, in the case of bancassurance, which has recently gained popularity as a sales channel, Korea prevents excessive competition and guarantees product selection diversity to customers by limiting the sales of a specific insurance company's products to no more than 25% of total sales.
On the other hand, Vietnam allows exclusive contracts, enabling certain banks to sell only specific insurance companies' products. As a result, banks have become too powerful, and excessive competition among insurance companies to secure bank channels is occurring. Without personnel familiar with local financial policies, one may fall behind in competition with other insurance companies.
Hwang said, "The Vietnamese insurance market has a short history and a shortage of local professionals with insurance knowledge and experience due to the continuous entry of global insurers. Legal systems and related infrastructure are still insufficient, making important decision-making difficult."
He explained, "Whenever there is an opportunity, I explain Korea's bancassurance regulations to local supervisory authorities and request the introduction of local regulations."
Despite excessive competition, Hanwha Life is striving to introduce more advanced and innovative insurance products to Vietnam. Hwang said, "Hanwha Life has been accelerating digitalization since the previous branch head's tenure. I intend to build innovative products and sales channels based on this foundation."
He added, "We are developing subscription insurance that provides various services in a subscription format when customers purchase insurance products through partnerships with various partners. This product has already been launched by the Korean headquarters and will be localized and launched to suit Vietnam's characteristics."
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