[Hanwha Life Expos?] ① Leap to Global Financial Group... Industry's First Entry into Banking Sector

Hanwha Group Launches Hanwha Life After Acquiring Daehan Life in 2002
Expands Global Market with Vietnam Foothold
First Dividend from Vietnam Subsidiary This Year... Enters Banking Sector

Editor's NoteHanwha Financial Group, led by Hanwha Life, is transitioning into a global system. It is expanding its global business territory by pursuing mergers and acquisitions (M&A) across Southeast Asia, including Vietnam and Indonesia, covering life insurance, non-life insurance, banking, securities, and asset management companies. This is a survival strategy aimed at overcoming the limitations of the domestic financial market and laying the foundation for sustainable growth. This article reviews how Hanwha Financial Group has grown so far and what blueprint it envisions for the future.

From Daehan Life → Hanwha Life → Hanwha Financial Group Growth

Hanwha Life was launched when Hanwha Group acquired Daehan Life, Korea's first life insurance company established in 1946, in 2002. Daehan Life retained its name even after being incorporated into Hanwha but changed to Hanwha Life in 2012. At the time of acquisition, Hanwha Life had accumulated losses amounting to 2.3 trillion KRW but succeeded in turning a profit in 2008, just six years later. Currently, it has become the main affiliate of Hanwha Financial Group, generating an annual net profit of around 1 trillion KRW.

Last year, Hanwha Life posted results ranking it second in the industry. Its consolidated net income was 826 billion KRW, following Samsung Life (1.8953 trillion KRW). Insurance profit was 848.8 billion KRW, ranking second, and investment profit was 208.2 billion KRW, placing third after Samsung and Kyobo. The insurance contract margin (CSM), a future profitability indicator for insurers, was 9.2385 trillion KRW, ranking second after Samsung. In terms of premium income, which gauges market share, it recorded 14.0794 trillion KRW, ranking third after Samsung and Kyobo. Its asset size is 126 trillion KRW, making it the second largest among life insurers.

The largest shareholder of Hanwha Life is 'Hanwha,' holding 43.24% of shares. Hanwha Galleria Timeworld, a group affiliate, holds 1.75%, Kim Dong-won, president of Hanwha Life and second son of Hanwha Group Chairman Kim Seung-yeon, holds 0.03%, and Yeo Seung-joo, vice chairman and CEO of Hanwha Life, holds 0.02%. Hanwha Life, which functions as the financial holding company within Hanwha Group, oversees financial affiliates including Hanwha Asset Management (100%), Hanwha General Insurance (63.3%), Hanwha 63 City (100%), Hanwha Life Lab (100%), Hanwha Claims Service (100%), Hanwha Life Financial Service (88.89%), and Hanwha Trust Management (46.18%).

Establishing a Global Business Footprint in Vietnam... First Insurer to Earn Dividend Income Overseas

The starting point of Hanwha Life's global business was Vietnam. In 2008, it became the first domestic insurer to establish a wholly-owned local subsidiary in Vietnam through 100% direct investment, rather than acquiring a local company or forming a joint venture (JV). The strategy was to build a foundation in the emerging Vietnamese market, which was growing at an average annual rate of over 7%, to pave the way for further overseas expansion.

Hanwha Life adopted a thorough localization strategy in the Vietnamese market. Only three expatriates, including the head of the corporation, were dispatched from headquarters, while all other employees such as sales managers and financial managers were locally hired. These local employees, who understood the Vietnamese insurance market and financial environment well and communicated smoothly with local agents, played a significant role in strengthening sales capabilities.

Premium income increased from 1.6 billion KRW in the first year of operation to 210.5 billion KRW last year. Starting with a capital of 60 million USD (approximately 80 billion KRW), the Vietnam subsidiary grew to have net assets of about 1 trillion KRW last year. Among 19 life insurers operating locally in Vietnam (including foreign companies), it ranks within the top 10 in market share.

Hanwha Life's Vietnam subsidiary became the first domestic insurer to generate net income in an overseas market in 2016, eight years after its establishment. This was the first case of a domestic insurer independently entering and earning profits overseas. Since then, the Vietnam subsidiary has maintained profitability for five consecutive years from 2019 to last year. The cumulative net profit since the subsidiary's establishment also turned positive as of last year. In late March, the Vietnam subsidiary resolved to pay a cash dividend of 1 trillion VND (approximately 5.4 billion KRW), marking the first case of a domestic insurer receiving cash dividends from an overseas subsidiary.

Leaping into a Global Comprehensive Financial Group Covering Insurance, Banking, Securities, and Asset Management

As visible results gradually emerged in Vietnam, Hanwha Life expanded its presence in Southeast Asia by entering the Indonesian market. In 2012, it acquired Multico, a local life insurance company in Indonesia. Last year, it further expanded its portfolio toward becoming a global comprehensive financial group by acquiring Lippo General Insurance, an Indonesian non-life insurer.

Hanwha Life's M&A activities continue this year. In April, it signed a contract to acquire a 40% stake in Nobu Bank, ranked sixth in Indonesia's business circles, marking the first overseas banking entry by a domestic insurer. Hanwha Investment & Securities, a Hanwha Life subsidiary, also signed an acquisition agreement last June with Ciptadana Securities, affiliated with Lippo Group, for an asset management company. Under the broader framework of Hanwha Financial Group, Hanwha Life has evolved into a global comprehensive financial group encompassing life and non-life insurance, banking, securities, and asset management.