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11 Mar 2008

HSBC enters Korean insurance market through joint venture Hana HSBC Life Insurance

Today marks a new beginning for the insurance joint venture between HSBC Insurance (Asia-Pacific) Holdings Limited (HSBC Insurance) and Hana Financial Group as the insurer has been renamed Hana HSBC Life Insurance and now carries a new corporate logo.

To support plans to aggressively expand its business, the two shareholders intend to provide Hana HSBC Life Insurance with an additional KRW20 billion injection of capital.  

Clive Bannister, Group Managing Director of Insurance, HSBC Holdings plc, said: "The joint venture will allow HSBC to extend its growing insurance business to Korea, an economy whose insurance market is the second largest in Asia and the seventh largest globally. Hana HSBC Life Insurance is a joint venture between business partners where each brings expertise and resources to the table to complement the other. Hana brings local market understanding, a well-known and respected brand and the third largest branch network in Korea through its bank. Coupled with expertise from HSBC Insurance and HSBC's own branch network, this is a coming together of two large financial groups to make a new force in the Korean insurance market-place."

In-sup Yoon, CEO of Hana HSBC Life Insurance, said: "The joint venture company, benefiting from the expertise and strength of both Hana Financial Group and HSBC Insurance, aims to become one of the top 10 insurers in the local insurance industry. As the first step, the shareholders intend to increase the company's capital by KRW 20 billion to KRW50 billion by the end of March 2008 to support business expansion plans."

Hana HSBC Life Insurance is realigning its distribution network and will look at expanding its bancassurance arrangements as well as strengthening its agency and telemarketing channels. Hana HSBC Life Insurance has already signed bancassurance partnerships with Hana Bank, HSBC in Korea, Hana Daetoo Securities, Mirae Asset Securities and Prudential Securities, and will continue to look for additional bancassurance partners.

HSBC Insurance acquired 50 per cent less one share of Hana Life Insurance (renamed Hana HSBC Life Insurance) in November 2007. The remaining interest in Hana HSBC Life Insurance is held by Hana Financial Group. Hana HSBC Life Insurance has KRW 882.5 billion in assets, KRW 231.1 billion in gross written premiums and 126,000 policyholders at the end of December 2007.

HSBC Insurance is the 13th  largest insurer in the world, serving 30 million customers globally through underwriting, agencies and insurance brokers. It has achieved US$9.1 billion (about KRW8,640 billion) in net earned premiums and US$3.1 billion (about KRW2,943 billion) in pre-tax profit in 2007, of which Asia accounted for 39 per cent.

David Fried, Chairman and Chief Executive Officer of HSBC Insurance (Asia-Pacific) Holdings Limited, commented: "Banking is no longer about just lending and savings – investment, wealth management, protection and pensions are all part of the equation of holistic financial planning. Bancassurance is playing a greater role in banking services and it is an area that is seeing some of the highest growth rates among insurance distribution channels globally. With HSBC's expertise in bancassurance and Hana Financial Group's strong local market presence, we aim to develop Hana HSBC Life Insurance into a key player in the bancassurance realm."

Mr Yoon added: "The joint venture company will take advantage of its partnership with HSBC Insurance, with its global insurance capabilities, winning bancassurance formula and trusted international brand."

Media enquiries
Gareth Hewett
+852 2822 4929
garethhewett@hsbc.com.hk

Vinh Tran
+852 2822 4924
vinhtran@hsbc.com.hk

1.  HSBC Insurance (Asia-Pacific) Holdings Limited
HSBC Insurance (Asia-Pacific) Holdings Limited, a wholly owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited, is the parent company of four underwriting companies: HSBC Insurance (Asia) Limited; HSBC Life (International) Limited; HSBC Insurance (Singapore) Pte Limited; and HSBC Amanah Takaful (Malaysia) Sdn Bhd (49 per cent held). Its shareholdings also include 50 per cent less 1 share of Hana HSBC Life Insurance Co., Ltd in Korea, 26 per cent of Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd in India, and 10 per cent of Bao Viet Holdings in Vietnam. Through its companies, it has a presence in the Hong Kong Special Administrative Region (SAR), the Macau SAR, Singapore, Taiwan, Malaysia, Korea, India and Vietnam. In Mainland China, it has representative offices in Beijing, Shanghai and Guangzhou. HSBC Insurance (Asia-Pacific)'s total assets were in excess of HK$100 billion at the end of December 2007.

2.  HSBC in Korea
HSBC entered the Korean market over 110 years ago. It first started its business in 1897 in Jemulpo (Incheon), and returned in 1982 by opening a branch in Busan. Today, HSBC has 11 branches and five commercial banking centres, employing over 1,300 people. HSBC is one of the largest investors amongst foreign banks in Korea. Total assets of HSBC in Korea were KRW17, 903 billion at 31 December 2007.

3.  Hana HSBC Life Insurance
Hana HSBC Life Insurance (formerly Hana Life) was established in 1991 and is now a joint venture between Hana Financial Group and HSBC Insurance. It turned to focusing on bancassurance in 2003 when regulations changed to support this form of insurance sales. In addition to bancassurance, Hana HSBC Life Insurance has also successfully developed telemarketing and agency channels. The insurer has assets of KRW882.5 billion, gross written premiums of KRW231.1 billion and 126,000 policyholders at the end of December 2007.

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