Shin Kong Financial eyes Vietnam

Shin Kong Financial Holding Co (新光金控), owner of the nation's second biggest life insurer, said in a filing to the Taiwan Stock Exchange yesterday that it had decided to apply for the Financial Supervisory Commission's approval to set up a life insurance subsidiary in Vietnam.

"The board has approved the plan. This will be a wholly owned life insurance subsidiary with capitalization of NT$1.2 billion [US$366 million]," Shin Kong Financial spokesman Victor Hsu (許澎) said in a telephone interview yesterday.

No timetable has been set yet for starting operations in Vietnam, Hsu said.

"The ratio of insurance coverage is very low there, which indicates big business potential. The company will first target Taiwanese companies operating in the country," he said.

Shin Kong Life Insurance Co (新光人壽) is the third life insurer to apply for the financial regulator's approval to expand into the fast growing economy. Cathay Life Insurance Co (國泰人壽), the nation's biggest life insurer, and Nan Shan Life Insurance Co (南山人壽) have obtained approval to set up subsidiaries in Vietnam.

The insurance market in Vietnam has seen robust growth with an average annual increase of 24 percent in premium since 1999, the commission's statistics showed. More than 10 foreign firms established footings in the country in 2005 alone, the commission said.

Shin Kong Life Insurance, meanwhile, is still waiting for Chinese authorities to grant a license for its joint venture with Hainan Airline Co (海南航空) to tap into China's insurance market.

The company said it expected to obtain the license by the end of this year and plans to start operations in Beijing early next year.