Following the successful introduction of bancassurance to South Korea in August 2003, ING group has bolstered its presence in the life insurance market by purchasing a 49% stake in KB Life. Along with Kookmin Bank, ING Group will utilise the KB Life name to provide a unique platform dedicated to bancassurance.
The deal is still subject to regulatory approval and the transaction is expected to be completed in the third quarter of 2004.
KB Life entered the insurance market on June 1 and will draw on the Kookmin network of over 1,100 branches across Korea to sell premiums. The focus for both ING and Kookmin's third joint venture will be offering life insurance and wealth management products. At present, the only wealth management product to be unveiled is the KB MyStar Annuity Plan, but further additions are expected to emerge in the near future.
KB Life was established after Kookmin acquired the asset and liabilities portfolio of Hanil Life Insurance for W2.5 billion in April 2004. Hanil was declared insolvent in 2002 following the Asian financial crisis, which left one third of all Korean life insurers bankrupt.
KB Life will run in tandem with the Dutch bank's other Korean insurance enterprise, ING Life Insurance Korea and will continue to offer insurance and insurance-related savings products through its network of over 4,100 financial consultants. ING Life will also sell its insurance products through a strategic alliance with Kookmin, which holds a 20% share of the insurer.
KB Life will attempt to emulate the immense success of Kookmin's current bancassurance venture that also sells insurance products for Samsung Life Insurance, Kyobo Life Insurance, Tong Yang Life Insurance and Korea Life Insurance. In April, the distribution channel netted W54.9 billion in first month premiums, which accounted for 41.8% of new policies sold by banks.
Under the first of three bancassurance phases instituted by Korean insurance regulators, banks are required to form business alliances with at least three insurance companies and with sales from one restricted from exceeding 50%.
The KB Life partnership between ING and Kookmin follows the establishment of two recent domestic and European joint ventures in the insurance sector. In 2003, Hana Bank joined forces with Allianz AG to create Hana Life and in 2002, French insurer Cardiff teamed up with Shinhan Financial Group to form SH&C Life Insurance Company.