Get Ready for 'Bancassurance'

Insurance companies and banks are busy pairing up as "bancassurance" will probably enter the Korean market earlier than expected.

Dongbu Fire & Marine Insurance Co. and Dongbu Life Insurance Co. said Tuesday that they plan to form a business alliance with Korea Exchange Bank. "Although we are at the initial stage of negotiations, we plan to develop products together with the bank," said a source from Dongbu Fire & Marine.

Samsung Fire & Marine Insurance Co. already has formed an alliance with Chohung Bank. Customer asset managers of the bank and risk management consultants of the insurance firm are working together one-to-one to learn from each other. KorAm Bank plans to pair with SK Life Insurance Co., while Korea Exchange Bank and Korea Life Insurance Co. will develop and sell insurance products jointly.

Insurance companies are generally more passive than banks because insurance firms have long thought bancassurance to be only a measure to diversify sales channels. On the other hand, banks, in which foreign insurance companies have invested, have made dash for bancassurance.

Shinhan Bank, which established a holding company with BNP Paribas, will open a bancassurance subsidiary with Cardiff, an insurance subsidiary of BNP Paribas. H&CB, whose major shareholder is ING Group, a Dutch insurance and financial service provider, has selected 100 insurance salesmen to handle bancassurance transactions. Hana Bank is currently considering to buy stakes of France Life Insurance Co., a subsidiary of its strategic partner Allianz , a German insurance and finance group.

by Choi Hyeon-chul