Dongbu Insurance Expands U.S. Operations Quickly Using CSC’s BPO Services

One of the largest non-life insurers in Korea, Dongbu Insurance is well established as a market leader and an innovator. Dow Jones ranked the company as the leading Korean insurer in its Sustainability Index in October 2009. However, in the face of challenging industry conditions and a slow-growing domestic market, the company needed to look beyond its existing territory to meet ambitious growth objectives. Over the past several years, Dongbu has pursued expansion opportunities overseas, adding a new branch in Hawaii in 2006 while maintaining a successful existing operation in Guam.

Most recently, Dongbu set its sights on the U.S. mainland, beginning with California. “California is an important market to us because of its size and the large Korean immigrant community there,” said Byung Hub Kum, general manager of Dongbu Insurance’s Los Angeles, California-based operations. In fact, Los Angeles is home to the largest number of ethnic Koreans outside of Korea.

Dongbu has developed a business model for overseas markets that focuses on profitable growth, with minimal initial investment and quick entry into new markets.

“We decided to make a ‘soft landing' into the market by outsourcing the administrative and IT operations for the new venture to someone with expertise in this insurance market,” Kum noted.

Freed of the need to invest large amounts of time and capital in infrastructure, the company would be able to set up the new venture rapidly, then increase its investment as the business grew.

Virtual Insurance Operations

After considering several candidates, Dongbu chose CSC based on several criteria: capability to support an entire insurance operation, depth of industry experience and knowledge, state-of-the-art technology, financial stability and attitude toward its clients. “We wanted a company that could ensure the systems and back-office operations would be ready when we were,” Kum explained. “We were confident in CSC’s ability to meet our needs now and as the business expands.”

Dongbu chose CSC’s business process outsourcing (BPO) services to manage the full range of back-office operations — including policy administration, customer service, print services, billing and payments, and compliance support. IT operations are hosted at CSC’s data center with CSC’s IT staff managing the applications. The solution includes POINT IN, CSC's comprehensive policy administration system for property and casualty/general insurance, as well as Agency Link, a browser-based portal that allows agents to quote and issue policies and access policy information over the Internet.

A Promising Start

For this new venture, Dongbu introduced three products in the California market: business owners, homeowners and dwelling fire insurance. These are among the most popular products in the Korean-American community and often are sold in conjunction with one another. Many Korean-Americans are small business owners who also wish to purchase coverage for their homes and rental properties.

CSC was able to meet Dongbu’s rapid launch goals, implementing the first line of business in about 8 months and the remaining lines within the first year. The business owners line went live in December 2009, and within 9 months the operation was supporting over $1.6 million dollars in premium. Dongbu supports a growing number of California agencies and policyholders with a skeleton staff of only 10 dedicated Dongbu employees.

Robin Bae, underwriting manager for Dongbu, said agents have responded well to the new system. "Our agents like Agency Link because it is so easy to use," he noted. The Web portal was customized to the unique requirements of Dongbu’s predominantly Korean sales force.

Looking to the Future

With its new venture fully operational, Dongbu is ready to expand into additional states and other lines of business when the time is right. The company is looking at New York as another market with a large Korean-American population, and is also considering introducing additional property and casualty lines.

“Further, even though the Korean-American community is the target market for the time being, ultimately we hope to be a local insurance company serving clients everywhere in the United States,” Kum added.

“We feel confident that we can pursue these opportunities successfully in partnership with CSC,” Kum said. “We have been impressed by the cooperative mindset and professional service of CSC’s staff. Dongbu is a very client-oriented company so we have very high expectations for customer service, and CSC has worked closely with us to make sure we provide the best service to our clients and agents.”