AXA Group, a Paris-based multinational insurance group, will expand its presence into the general insurance market in South Korea next year, the group’s Seoul subsidiary confirmed on Tuesday.
According to AXA Direct Korea, the group will invest 25 billion won ($21.4 million) in the Seoul-based subsidiary in a bid to increase the general insurance business of the company, moving beyond the originally-focused direct car insurance market.
CEO Francois Lecomte, who visited the group headquarters last week, received the group’s approval of the investment plan last Tuesday.
The purpose of the investment is to raise the proportion of general insurance products up to 30 percent by 2020 from the current 12 percent in the subsidiary’s portfolio, said head of public relations at the company.
AXA has been concentrating on car insurances since its launch in Korea in 2001. About 88 percent of 396.3 billion won in sales as of June was from car insurances. It was the first to introduce direct insurance programs in the Korean market.
Due to high loss ratios of around 78 percent, automobile insurance is considered a money-losing business in the insurance sector. However, despite this insurers face difficulties raising premiums due to fierce price competition. Local general insurance firms offset their losses from car insurances with other general insurances.
“It is quite a strong drive to boost the Korean business,” said the PR officer. “Since we have been doing the direct insurance as the first in the market, we do have great know-how and will keep it up both in the car and general accident insurance.”
Including Korea, AXA Group is planning to boost its investments across the Asian region, judging the Asian insurance market has high growth potential, the officer added.
“Since customers here are very digital friendly, we do have a competitive edge,” she said. “We will try to bring in good general insurance products from our group.”
Additional investments can also be made to expand sales and marketing activities, the company added.
By Song Su-hyun (email@example.com