Hanwha enters individual insurance market

JAKARTA. South Korea-based insurance company Hanwha Life Insurance Indonesia has teamed up with its compatriot lender KEB Hana Bank to market its first ever individual insurance product through bancassurance.

Hanwha Life Insurance Indonesia chief operations officer Suharyono Hadisumarno said in Jakarta on Tuesday that the collaboration to sell insurance products through a bank (bancassurance) was his company’s effort to tap deeper into the country’s large life insurance market.

“We realize that bancassurance has big potential [for product marketing],” he said after the signing of the cooperation agreement.

Hanwha Life Insurance Indonesia has launched a health insurance product, HealthyPlus, and, as of Tuesday, will market it through KEB Hana Bank’s 46 branches. Previously, the firm sold insurance products through agents and business groups employee benefits.

Suharyono said that his company saw a potential of around Rp 20 billion (US$1.48 million) in premium income annually from the cooperation with KEB Hana Bank, adding that it was also assessing two to three other lenders to work with and that the insurance company aimed at booking Rp 60 billion in premium income by year-end.

Currently, Hanwha Life Insurance Indonesia distributes only credit life products to a few lenders through bancassurance — a marketing tool it started developing last year. Banks such as Artha Graha Bank, Sinarmas Bank alongside several rural (BPR) and regional development banks (BPD), are the firm’s current customers, said Suharyono.

Credit life is a life insurance policy designed to pay off a borrower’s debt to a lender, in the event that the borrower dies before having a chance to repay the loan in full.

Hanwha Life, the oldest and second-largest insurance company by sales and assets in South Korea, acquired 80 percent of shares of Multicorlife Insurance — now Hanwha Life Insurance Indonesia — in December 2012, with a transaction valued at US$13 million.

Meanwhile, KEB Hana Bank’s consumer business and operation director Anthony Soewandy said he hoped that the new cooperation could increase his firm’s fee-based income to diversify its revenue sources, which currently rely on interest income.

“We will partner with another five insurance and six asset management firms in order to provide a variety of financial products for our customers to choose from,” he said, adding that starting this year, the lender is set to focus on consumer banking and small and medium enterprises (SMEs) as in the previous eight years, it had focused heavily on corporate and commercial funding.

Anthony stated that his firm wanted to pick up the amount of consumer lending from what is currently resting below 5 percent, aiming to raise this figure to 25 percent in the next three years. Working toward boosting individual funding from the current 30 percent of the total to more than 50 percent, as a way to diversify risks, will also be a focus.

KEB Hana Bank booked outstanding growth in this year’s first nine months, as its profit before tax jumped 40.60 percent year-on-year to Rp 410.66 billion and its assets value soared 60.37 percent to Rp 27.95 trillion. The lender saw its equity increase 59.03 percent to Rp 4.42 trillion after South Korean Hana Financial Group injected capital of Rp 1.3 trillion in July.

As of September, its loans amounted Rp 20.23 trillion, or 56.14 percent higher year-on-year, and its non-performing loan (NPL) rate stood at 0.37 percent. (Prima Wirayani)