Korea Life Forms Joint Venture With China’s Zhejiang International

South Korea's second-largest life insurer, Korea Life Insurance Co. Ltd., said it has won the Chinese regulatory approval to set up a 50-50 joint venture in China with Zhejiang International Business Group Co. Ltd., a state-owned asset management company.

The life insurance joint venture will have total capital of 500 million yuan (US$79 million), which will be evenly funded by Korea Life and Zhejiang International. The venture will be based in Hangzhou, the capital of Zhejiang province in eastern China. It will also be allowed to start operations in 2012, said Korea Life in a statement.

Seoul-based Korea Life said it will be responsible for the overall business management of the joint venture, with a strategy of localizing the operation.

Korea Life set up a representative office in Beijing in August 2003. It then entered into a memorandum of understanding with Zhejiang International in December 2009. "With the insurance market potential and domestic economic growth in China, the joint venture is expected to begin its business in the Yangtze Delta region," said the insurer.

In April 2009, Korea Life entered Vietnam and engaged with more than 2,000 registered financial planners initially offering endowment policies and education savings plans. The company said it has set a target "to triple its sales force in Vietnam by 2013, with projected annual premium income in excess of US$35 million."

The insurer plans to expand its branches from five in 2010 to 20 in 2015, and increase the number of its financial planners to 13,000 in the mid to long term, in Vietnam.

Korea Life was listed on the South Korea Stock Exchange in March 2010, raising capital to fund further development in the domestic life insurance sector (Best's News Service, March 17, 2010). The insurer's global network includes offices in Tokyo and London, as well as an investment subsidiary in New York.

In 2010, Korea Life reported gross written premiums of more than 6.54 trillion won (US$5.79 billion), and a 12% market share of the Korean life insurance business, according to the Korea Life Insurance Association.

(By Rebecca Ng, Hong Kong news editor: [email protected])