Established in 1969, SGI has grown along with the Korean economy by providing guarantee services throughout the entire economic landscape. Now, SGI is the largest comprehensive guarantee insurer in Korea in fact as well as in name. To build upon that, SGI is expanding globally.
With solid credit ratings of AA- by Fitch Ratings and A+ by S&P, SGI posted a record-high premium revenue of $1.642bn and also delivered more than $449m in net profit in 2022. Such an outstanding performance shows that SGI is one of the top-tier financial institutions in the world.
Against this backdrop, CEO Kwang-Yeol Yoo has been moving forward with the global business expansion under the Global, Digital and Partnership (GDP) strategies that he set up after taking office in 2020.
Particularly, on the global business front, SGI delivered tangible results by expanding footprints and diversifying revenue streams.
Targeting Asian countries with strong growth potential
The first target of SGI’s global expansion was Vietnam. In 2007, SGI set up its representative office in Hanoi, which served as a platform to introduce the guarantee insurance scheme to Vietnam through statutory amendments. After years of achievements in the country, SGI became the first foreign non-life insurer to open a local branch in Vietnam in 2014. Hanoi branch mainly supported the Korean companies operating in Vietnam, but recently has started to eye up the country’s local guarantee insurance market as well.
Then, SGI entered the Chinese market by setting up its representative office in Beijing in 2008, given that China is the largest trading partner for Korea and has a strong growth potential. Online insurance brokerage platforms are widely used in China unlike in other countries and thus SGI reached out to Chinese InsurTech companies to forge partnerships. This May, SGI concluded an MOU with Gongbao Tech, which is the largest construction guarantee platform in China, to create a new business model through strategic alliance.
In addition, SGI sought new opportunities in the ASEAN region by setting up a representative office in Jakarta, Indonesia in May 2022. The representative office is currently taking steps to forge partnership with an Indonesian non-life insurer to offer guarantees for the Korean companies operating in the local market.
For SGI, ‘why isn’t there any forum in Asia to share views on guarantee insurance?’ had been a lingering question. Thus, SGI founded the Asia Guarantee & Credit Insurance Association (AGCIA) in 2020, which is the first bloc aimed at promoting the guarantee and credit insurance business across Asia. Currently, the association has 17 members from 10 Asian countries.
To facilitate the guarantee and credit insurance business development in the region, the AGCIA provides various training and networking programs for Asian (re)insurers such as capacity building seminars and business collaboration opportunities. Efforts to boost the Association’s activities, such as attracting new members and strengthening partnership, are in progress.
Such efforts delivered tangible results. This April, SGI entered into an MOU with Mongolian Re which is one of the AGCIA’s members and also the one and only national reinsurer of Mongolia. Under the MOU, SGI and Mongolian Re supported Mongolia to adopt the guarantee insurance scheme through the amendments of the country’s Insurance Business Act and the Public Procurement Act.
In addition, SGI concluded an MOU with Forte Insurance last October. Under the partnership, the two companies held a joint workshop where SGI provided an overview of the guarantee insurance scheme in front of the regulatory bodies of Cambodia. Currently, SGI is cooperating with Forte Insurance for it to develop a customized guarantee insurance product.
Going beyond Asia
SGI is building a value chain in other parts of the world as well.
In October 2022, SGI set up SGI MENA, which is SGI’s first-ever foreign subsidiary located in Dubai, UAE. Through the subsidiary, SGI is to diversify reinsurance revenues and expand its market in the Middle East.
SGI’s presence in the Middle East dates back to 2009 when it opened its MENA representative office to provide guarantees for the Korean firms entering the Middle East construction market. However, under unfavourable market conditions, SGI shifted its strategic focus from original insurance to reinsurance. Accordingly, SGI decided to set up an independent insurance management and intermediation company to strengthen reinsurance underwriting, thereby boosting the overall growth in its inward reinsurance business of the Middle East.
In parallel, SGI is gaining a foothold in the global market in partnership with multi-lateral development banks such as the IDB and the EBRD.
This March, SGI entered into an MOU with the IDB for further development of the guarantee insurance industry in Latin America.
In accordance with the MOU, the two institutions will conduct joint research on Latin America’s guarantee insurance products and provide guarantee services for the Korean companies operating in the region.
SGI’s New York representative office played a key role for the MOU. Established in 2012, the representative office has been focusing on the research of surety products of the US. Currently, it is working on creating a business model to meet the surety demand of the Korean companies based in the US.
In addition, SGI forged partnership with the EBRD to enter the European market. This July, SGI seconded a staff member to the EBRD so he could participate in the Bank’s trade facilitation program. SGI looks forward to acquiring advanced knowledge on trade finance, thereby escalating business expertise.
SGI aims to grow into a global guarantee insurer by creating a business environment, expanding network with international banks and implementing business strategies worldwide.
“We are committed to implementing global strategies consistently and systematically to become a global guarantee platform,” said CEO Kwang-Yeol Yoo. A
A regional bloc created under the vision "Make Asia a Better Place to Live by Promoting the Guarantee and Credit Insurance throughout Asia"
Membership is now open to all Asian Insurance companies.