To Wider, Broader Horizon

Samsung Life to increase capital through stock market to find new growth engines abroad

Samsung Life, the nation's largest life insurance company, looks forward to a new period in its operation with the way open for its public listing as it celebrated the 50th anniversary on May 5.
Now that the way has been cleared for life insurance firms to list their shares on the stock market, the financial community is watching the moves of the nation's largest life insurance company in the country.
Samsung Life started as Dongbang Life Insurance in 1957 and in a year and half's time, became the largest life insurance firm. It became officially a member of the Samsung Group in 1963.
Its assets reached 100 billion won for the first time for any firm in the secondary financial sector in 1978, 1 trillion won in 1983 and to 100 trillion won in 2006. The company had an honor of being listed among Fortune 500 List last year and the 18th among life insurance firms in the world.
On the occasion of its 50th anniversary on May 5, the company announced its new slogan, "Leading Global Company Guaranteeing Financial Stability."The company plans to remap its business territories to secure new revenue sources, strengthening its core business sectors including annual stipend and guaranteed insurance. It also plans to continue to reform its management structure to achieve all the goals
The company's 50th anniversary vision calls for achieving 60 trillion won in annual sales by 2015, total assets 200 trillion won, annual net profit 2.5 trillion won, and ROE 15 percent to rank among the top 15 life insurance firms in the world.
President Lee said reform, organization culture, and customer care will be the three major software to ensure Samsung Life to continue to grow in the next 100 years with a special emphasis on social capital. What the CEO meant by social capital were trust and respect Samsung Life should strive to get from society as its member. He said life insurance firms have been voicing the importance of their social contribution and their words are not empty ones. "They really mean what they have been saying,"the chief executive said.
The establishment of regulations for listing life insurance firms on the stock exchange last year would be an opportunity for Samsung life to map out new strategies as a listed firm.
Samsung Life officials said the domestic life insurance market has reached a mature stage with so many foreign life insurance firms entering the market in recent years. Listing on the stock market will make Samsung Life possible to increase its capital as it is about to expand abroad in search of new growth engines.
Since its establishment 50 years ago, our company has been dedicated to finding ways to live in harmony with others instead of focusing on just generating profits, as interdependence is the main concept of life insurance, That's why we have always been involved in social contribution activities, said President Lee Soo-chang of Samsung Life Insurance Co. in an interview with a news media recently.
Turn your eyes to foreign markets, and you will find that it's relatively easy to find high-quality bonds. A reliable asset management company should be able to diversify the credit risk by investing in foreign bonds, which yield as high returns as Korean bonds with the same credit risk.
It is essential for an insurance company to invest safely on a long-term perspective. However, while the average maturity period of debt of Korean insurance companies is between seven to eight years, the average maturity period of domestic bonds is 2.5 years. In order to invest in long maturity options, insurance companies must have the capabilities to invest in foreign markets.
Managing assets is like sailing in the vast ocean. Following the coastline for a couple of yours is very different from sailing the ocean for months and years. In order to cross the ocean safely, you need to choose a boat that's big enough to ride dangerous waves and safely carry you to your destination.
When it comes to asset management, Samsung Life is like a gigantic carrier. Samsung Life never misses new investment opportunities while investing in stocks, bonds, real estate, and other traditional investment options. Samsung Life aims for safe investment by focusing on high-quality bonds of major foreign markets, while also creating new sources of income by developing new financial products such as private equities, hedge funds, and credit linked notes through exhaustive analysis and risk management.
The company uses tactical asset allocation(TAA) for short-term market conditions after establishing a Strategic Asset Allocation (SAA) plan based on a long-term and stable revenues that match the characteristics of insurance assets.
In 1996, Samsung Life invested a total of $200 million in the U.S. and European stock markets in order to build a strong, long-term portfolio. nw

President Lee Soo-chang of Samsung Life Insurance Co. during the ceremony for the company's 50th anniversary on May 5.