ID :
110939
Thu, 03/11/2010 - 08:15
Auther :

(Yonhap Interview) S. Korea's life insurance market may grow to world's fifth largest, Aviva says


By Park Bo-ram
SEOUL, March 10 (Yonhap) -- South Korea's already matured life insurance sector
will grow to the world's fifth largest market in a few years, London-based
insurance giant Aviva Plc. said Wednesday, vowing to become a major player here.

"If I look in the next five years, South Korea in one of the five biggest markets
in the world for new life and savings products to come through," Simon Machell,
chief executive officer of Aviva's Asia-Pacific operations, said in a telephone
interview with Yonhap News Agency.
Aviva, the No. 2 life insurer in Britain, operates in South Korea as Woori Aviva
Life Insurance Co. in partnership with the nation's second-largest financial
service firm Woori Finance Holdings Co. The British insurer entered the local
market for life insurance in 2008 after acquiring a stake in local insurer LIG
life Insurance Co. for 137.2 billion won (US$121.2 million).
South Korea stood as the world's eight largest market for life insurance as of
2008, with a gross premium of $66.4 billion. The United States ranked as the
largest market while fast-growing China ranked as sixth biggest, according to the
Korea Life Insurance Association.
He said the South Korean insurance market, viewed as already saturated by some
experts, still has room for further growth and Aviva sees opportunities.
"If you look at the wealth and growth of the country, there will be quite big
enough demand (for life insurance policies)" even though there's a lot of
competition in the local market where a large number of big-size insurers
compete, Machell said. "There are still opportunities".
He noted "the big area which will continue to grow is health insurance products"
in South Korea where the insurance market is ripe enough and adopted all ranges
of insurance types that further sophistication including sales of more tailored
protection will lead the market expansion rather than introduction of new
products.
The rate of South Korean households that hold life insurance policies fell for
the first time in 30 years last year with 87.5 percent of households owning a
life insurance policy with private insurers and public agencies, down 1.7
percentage points from 2006 and the first fall since 1976, according to the Korea
Life Insurance Association. A market is deemed saturated when the rate reaches 90
percent.
The CEO said "we would like to become top 10 insurer in the market" without
resorting to further acquisitions. The joint venture with Woori Finance was the
14th largest player as of 2009.
South Korea accounted for 21 percent of Aviva's life and pension sales in Asia
Pacific which represents 5 percent of its total business.
Korean life insurers swung to profit last year from losses in 2008, helped by
investment gains stemming from stock market recoveries from a global financial
crisis.
"It will take a couple of years more to get back to the confidence levels we saw
back in 2007" and new insurance sales start to drive profits," Machell said.
pbr@yna.co.kr
(END)

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