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Friday, 19 June 2015

KorEconomics 101 (한국경제학개론), Part XIV: Heungkuk Financial Group - a subsidiary of Taekwang Group

Jonathan Borofsky’s “Hammering Man” stands outside the Heungkuk Life Insurance Building
Heungkuk Financial Group (Hangul/Romanization: 흥국금융그룹/Heungkuk Geum-yung Group) is a company that specialized in insurance, equities and savings in Korean Republic. It is a subsidiary of Taekwang Group, one of the famous Chaebols in textiles and petrochemical products. The headquarters of the company is located at Heungkuk Life Insurance Building - 68 Saemunan Avenue/Saemunanno, Sinmunno 1-ga 226-beonji, Seoul Jongno-gu

Heungkuk Life Insurance (흥국생명/興國生命/Heungkuk Saengmyeong), one of the nation’s leading mid-sized insurance companies founded in 1950, became part of the Taekwang Industrial Group in 1973. The acquisition was the first foray into finance after a long history of satisfied customers in the chemical and textile businesses for the company, which has no relation to the firm of the same name involved in the Park Yeon-cha bribery scandal.

After two years as part of the Taekwang family (1975), Heungkuk had made 1 trillion won in contract holdings, and in 1981 it started a nationwide online insurance service. The life insurer expanded its contract holdings by 10 trillion won in 1988, then by 20 trillion won in 1990. Though not as big in terms of volume as Korea’s top three insurers - Korea Life Insurance (present-day Hanwha Life Insurance), Samsung Life Insurance and Kyobo Life Insurance - Heungkuk has pushed to fill its own unique niche.

In order to differentiate itself, Heungkuk started offering bancassurance services, a first for a local insurer, in 2003. These packages are offered to banks so that they can sell insurance and other financial products through the same channels. As the pioneer in the field, Heungkuk boasted the highest sales of bancassurance products in Korea in fiscal year 2007.

Step by step, through mergers and acquisitions, the Taekwang Industrial subsidiary developed into six finance-related sister companies under the Heungkuk Finance Group. The currenct companies are Heungkuk Securities, Heungkuk Asset Management, Heungkuk Fire & Marine Insurance (past-day Heungkuk-SsangYong Fire & Marine Insurance), Yegaram Bank and Goryo Bank.

Heungkuk Fire & Marine Insurance Co., Ltd. (흥국화재/興國火災/Heungkuk Hwajae) engages in the insurance business in South Korea. The company offers automobile, medical, children, silver, accident, general, annuity and savings, fire and property, traveler’s and leisure, and group insurance products. It also provides insurance for bancassurance, insurance contract loan, apartment collateral loan, and real estate collateral loan products. The company was formerly known as Heungkuk-SsangYong Fire & Marine Insurance Co., Ltd. (흥국쌍용화재/興國雙龍火災/Heungkuk-SsangYong Hwajae) and changed its name to Heungkuk Fire & Marine Insurance Co., Ltd. in 2009. Heungkuk Fire & Marine Insurance Co., Ltd. was founded in 1948.

Heungkuk Life Insurance and Heungkuk Fire & Marine Insurance together rake in 13 billion won in insurance premiums and fees monthly with assets of 8.4 trillion won and sales of new policies worth 3.4 trillion won as of March 2008.