South Korea top banks tap insurance market

Sagging profits the nation’s top 4 prompted them to hire more employees to boost insurance business.

Korea’s four largest banking groups are seeking to beef up their insurance units as their flagship banks face sagging profits. 

This is part of the four major financial groups’ attempts to step up their nonbanking operations, including acquiring savings banks, to gain footholds in previously unexplored sectors.

KB Financial Group, the owner of top lender Kookmin Bank, has set a goal to build up its affiliate KB Life Insurance from a company dependent on bank branches for sales to a comprehensive insurance company by increasing the number of its branches five-fold from 15 to 75 by 2013.

The company will also bolster its sales force from roughly 200 to 2,500 agents by 2013, and expand its portfolio beyond savings-type insurance policies to high-return products such as annuities and protection-type policies.

The move comes after KB Financial Group Chairman Euh Yoon-dae said earlier this month that the company may consider purchasing a life insurance company in a bid to strengthen the group’s nonbank business, which accounts for around 20 percent of its business revenues.

Shinhan Financial Group is also set to hire more than 1,000 employees to reinforce its life insurance unit.

View the full story in Joong Ang Daily.