Mr Back Jong Kook, General Director of Hanwha Life Vietnam, spoke with VET about why the company has decided to increase its capital in Vietnam and the potential of Vietnam's life insurance market.
Why has Hanwha Life Vietnam decided to increase its charter capital at this time?
The capital injection expresses the great expectations and firm belief of the Hanwha Group in Hanwha Life Vietnam and affirms our long-term commitment for investing to Vietnam. With the capital increase, Hanwha Life Vietnam will further improving the quality of its product and services to meet customer demand and to enhance the competitive strength to the market. We
Mr Back Jong Kook
have now jumped into the Top 3 in terms of charter capital among 16 life insurers in Vietnam. This good news is not only bringing the confident to our staff and financial consultants (FCs) but also helping build the trust with customers.
As you said, Hanwha Life Vietnam is now top 3 highest charter capital among 16 life insurers in Vietnam after the capital increase Do you think the capital increase will assist Hanwha Life Vietnam to reach a higher position in Vietnam’s insurance market?
We are not aiming to a higher ranking, but looking for long-term and stable business development and fulfilling our principle of “The Customer is No 1”. We are now striving continually to improve the quality of our products, services and human resources to meet customer needs. With the capital injection we firmly believe that Hanwha Life Vietnam has the resources to reach new heights in services and professionalism.
What have been Hanwha Life’s key achievements in the five years since it arrived in Vietnam?
Hanwha Life Vietnam has successfully established core operating fundamentals, with over 200 staff and nearly 12,000 FCs working in 35 offices nationwide. Hanwha Life Vietnam is trusted by nearly 46,000 customers and their families. It has been honoured to receive a Golden Dragon Award for four consecutive years, in 2010, 2011, 2012, 2013, for “Best Financial Services”, from Vietnam Economic Times. Recently, our produces also have been awarded “Top 100 – Excellent Products & Service” voted by The Vietnam Standards and Consumers Association. .
Regarding business result, as by the end of June, Hanwha Life Vietnam had achieved annualised first-year premiums (AFYP) of VND98.4 billion (nearly $4.6 million), an increase of 173 per cent compared with the same period last year. It is notable that from February to June this year Hanwha Life Vietnam has exceeded the results of February to June last year. In the first half the number of new FCs stood at 3,499 and their skills and productivity have improved dramatically. Thanks for their outstanding efforts, Hanwha Life Vietnam has jumped to seventh position in terms of AFYP among the 16 life insurers in Vietnam (as at May 2014).
What are the challenges facing insurers in Vietnam?
Despite the life insurance market recording double-digit growth, awareness among Vietnamese people about life insurance is not high. There are more life insurers joining Vietnam’s life market and this will create stronger competition, especially in human resources.
Do you agree that companies should focus not only on profits but also their corporate social responsibility (CSR)? Can you tell us a little about Hanwha Life Vietnam’s CSR efforts in Vietnam?
I totally agree. Companies should conduct CSR to contribute practically to the local community. Understanding that “giving is receiving”, Hanwha Life not only develops its business in Vietnam but also plays a positive role in social development. This is why, from the very beginning, Hanwha Life decided to spend large amounts on CSR so that we can best support the poor, the elderly, the disabled and orphans in Vietnam. Through our long-term charity programme we have donated over 30,000 meals to poor patients at hospitals. Within 2013 and 1st half of 2014, we have granted over 10,000 health insurance cards to the poor and 140 “houses of love”, 2 schools to community in over 20 cities and provinces in the country. The cost for these CSR activities could be said that over VND10 billion.
Hanwha Life Vietnam recorded higher growth from February to June this year compared to last year. What lies behind this success, and what strategies are in place for the future?
The secret of our impressive results in the first half of this year comes from a proper strategy being adopted and the continued efforts of our staff and sales force. Our target is that, by 2017, Hanwha Life will be one of the leading companies with the best quality services and be among the Top 5 life insurance companies in Vietnam by 2020.
How does Hanwha Life view the potential of the life insurance market in Vietnam as an avenue for growth?
The life insurance penetration rate is still low, at around 5 per cent, so there is large room for all types of life insurance products. The number of players in the country’s life insurance market is sure to grow from the existing 16. With the country’s socio-economic development, Vietnam’s future is very bright indeed, especially in banking, finance and investment. Customers are already offered diverse financial services and products to satisfy their needs. In these challenging economic times, however, Vietnamese will tend to prioritise protection over investments, as investment opportunities are less attractive and disposable incomes are lower.
On the other hand, the burden of medical costs, education expenses as well as health concerns appear to becoming heavier. People will therefore take the quality of services into account when making a final decision over savings or investment. I continue to believe in the prospects for the country’s life insurance industry. With increasing awareness, people will understand more clearly what life products are available. Policyholders will become more confident during the early stages of a life product, and it has been shown that the life spans of contracts have been growing recently.
What else would you like to share with our readers?
I would like to close with a very simple word: Trust, which is one of our group’s core values and is the commitment between our company, our staff and our FCs and our customers..
Key achievements, first half of 2014
- Mr Back Jong Kook
- Hanwha Life Vietnam