Hanwha Life - Earn Dividends - Vietnam

Hanwha Life Insurance Co. is set to earn dividends from its Vietnamese subsidiary, reporting a cumulative profit after 15 years, becoming South Korea’s first insurer to collect such a return from its overseas units.

Hanwha Life’s wholly owned unit in Vietnam decided on cash dividends of 100 billion Vietnamese dong ($4 million) at an employees’ general meeting last week. It was the first time for a South Korean insurer to collect dividends from overseas subsidiaries, excluding those of equity investments. South Korean life insurers Samsung Life Insurance and Mirae Asset Life Insurance have overseas units in Thailand and Vietnam, respectively, that have posted profits. But they have yet to collect dividends from those subsidiaries.

Hanwha Life’s Vietnamese subsidiary achieved cumulative profit after 15 years in 2023, marking the first overseas unit of a South Korean insurer to record such a surplus. The subsidiary logged a net profit of 47.1 billion won ($34.1 million) last year, about six times the 8 billion won in 2021.

Few South Korean financial companies such as banks and securities have earned dividends from their Vietnamese subsidiaries due to the Southeast Asian country’s tough regulations. Most South Korean financial firms have accumulated profits from their subsidiaries in the nation only as retention or for re-investments.

Hanwha Growth In Vietnam - Korean insurers have been increasingly expanding their overseas businesses as the local market has become saturated due to the country's aging population and record-low fertility rate.

The subsidiary, the first overseas unit of South Korean insurers, became one of the top 10 life insurers with assets of 981.6 billion won last year. Its premium income surged to 210.5 billion won last year, about 100 times the 23 billion won in 2009, its first business year.

The unit, which had only two offices in Ho Chi Minh and one in Hanoi in 2009, now operates 119 branches in major cities. Hanwha Life aims to expand its business further in the Southeast Asian country, given its strong growth potential.

Hanwha Life’s Vietnamese unit has been focusing on localization for the market to expand the business. The subsidiary has only three employees from its headquarters in Seoul, while all other staff are locals who better understand the domestic financial environment.