Korean Life Insurance: Taking a Long-Term View in Vietnam

“Difficulties in the current economy and financial activities are mainly in a short-term while Vietnamese life insurance market is still very attractive and with potential. Although we came into Vietnam approximately 8 months ago, during the global economic downturn, high inflation, and a challenging financial situation, Korean Life has been able to achieve good results, 300% of our YTD target. It is a great start for Korean Life”, shared Mr Francis Jungseop Hyun,General Director of Korean Life Insurance (Vietnam) in a talk with Vietnam Business Forum. 

 

Could you briefly introduce Korea Life Insurance’s activities after 8 months of operation in Vietnam? 

Korea Life was established in 1946 and was the first life insurance company in Korea. With more than 60 years experience in life insurance, Korea Life will be able to offer Vietnamese customers outstanding benefits through tailor-made products and services.  

 

In South Korea, we have made great contributions to the economic development of the country, whilst also improving the living standards of our customers. Similarly, when investing in Vietnam, we also aim at making considerable contribution to the economic development of Vietnam and promoting the company’s development in the light of enhancing customer benefits. When investing in Vietnam, we do not aim at short-term profit but long-term growth. This applies to Korea Life Insurance in South Korea as well as in emerging markets like Vietnam.  

 

Now Korea Life is offering the following insurance products to Vietnam’s market: Education Endowment, Anticipated Endowment, Term Life, Waiver of Premium, and Accidental Death and Disablement Insurance. In addition to their widest scope of cover as compared with similar products in the market, Korea Life’s products also attract customers with its high flexibility, competitive premiums, and ability to meet customers’ diversified savings and protection needs. Notably, when purchasing a life insurance contract from Korea Life, the customers can also insure their whole family to be protected against unexpected mishaps in life. This will give them maximum peace of mind at affordable cost. Korea Life is actively making preparation to bring more popular life insurance products to Vietnam. 

 

Although Vietnam’s life insurance market has now been through the start-up stage with galloping growth rates, the market potential remains very attractive. In fact, Vietnam is one of the 15 most populated countries with more than 54 per cent of the population aged less than 30. Only 5% of Vietnamese people have purchased life insurance, whilst this rate in South Korea is more than 90%. In addition, the entry of Vietnam into the World Trade Organization (WTO) 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 Vietnam’s GDP growth in 2009 is forecast at 5%.  

 

The life insurance market in Vietnam just started 13 years ago, but intensive globalization and advancements in communication technology have made it possible for Vietnam to quickly catch up with more mature markets. Even though most Vietnamese clients are still buying endowment insurance as a saving vehicle for medium and long-term goals, especially for their children’s education, more modern and sophisticated products like Universal Life Insurance and Unit Linked Insurance Plans have attracted quite a lot of customers over the last few years because of the transparency and the flexibility which these products offer. In the coming years when the financial services in Vietnam becomes more mature, the foreign invested life insurers will continue to introduce more sophisticated life insurance products to Vietnam, such as Investment Bond, Income Protection Insurance, Annuity, and Pension Funds, etc. 

 

Currently, at least 30% of the Vietnamese population can afford to buy life insurance products, and this number is increasing quickly. However, the number of people insured is merely 5%. The ratio is much lower as compared with other developed countries. Since our official opening on March 31^st, 2009 we are very pleased that even though our sales targets are quite challenging we have been able to achieve more than 300% of our YTD target. This is not only a great start for Korea Life Vietnam but also a persuasive proof that the market potential is really huge.  

 

Our prime target market includes families with annual household income of VND 50 million or more. A typical policy owner is a married person with children who has a high sense of responsibility to his or her family. 

 

Different from consumer goods, life insurance products are not bought - they are sold. Life insurance products are not an investment product but a pure protection. In other words, our Financial Consultants have to help their potential customers to understand the importance of life insurance, and then find out their needs and affordability, and finally propose insurance products which are tailored to their needs and affordability. Therefore, the key in our marketing strategies is to focus on recruiting quality agents and giving them intensive training, coaching and support so that they can provide the best advice to our potential customers. 

 

As a life insurance company, our objective is to help Vietnamese customers to save and invest for future financial goals whilst protecting their families from financial loss resulting from death or disability of the life insurance participants. Besides, we also want to help people who cannot help themselves to make a change in their life. In fact, Korea Life is very well-known in South Korea for social activities. For one charity program called “Korea Life’s Day of Love” that was launched in September 2004, there were 148 social work groups with 30,000 volunteers, each spending at least 20 working hours per year for this program. 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. 

 

Therefore, we have decided to spend most of our Marketing budget in 2009 on the “Korea Life’s Day of Love” charity programs so that we can best support poor people, unattended old people, orphans and disabled people in Vietnam. In addition to our long-term support for the poor patients at Hospital of Pediatrics No. 2 and the National Hospital of Pediatrics, we have so far organized at least 2 charity programs every month. And we have planned for many more social activities in the upcoming months with the hope that we will be able to join hands with the community in making more lights of love. Recently, we have cooperated with An Sinh Hospital (HCMC) and Tri Duc Hospital (Ha Noi) to organize a free health screening program for women during the period from 18/10 to 27/10/2009. With its motto “thousands of joy, ten thousands of happiness”, this program is specifically designed for women aged 25 or above, married, and living in Ho Chi Minh City and Ha Noi. Besides that, we are now actively preparing for lots of community support programs related to Vietnamese Teachers’ Day and X’mas 2009 as well as preparing a big fund for charitable acitivites in the next few years.