AGCS, which opened its Korean unit in June 2017, believes there is much room for growth in the corporate insurance market, reports The Korea Times. According to AGCS Korea chief executive Noh Chang-tae, the insurer will focus on its insurance coverage for product recalls, given strong momentum in the business.
“An increasing number of Korean firms now have to meet tougher customer standards and environmental regulations,” Noh said during a press conference. “More companies are being ordered to carry out product recalls every year. AGCS is now offering its corporate insurance services with about 100 Korean firms. Of them, however, less than 10 companies have so far bought the corporate recall insurance.”
While the Korean unit has yet to become profitable, Noh believes that it will soon be in the black.
“It is not easy for a firm to post a net profit so soon after it is established,” he said. “I believe we turn things around within three years, considering the nation’s promising recall insurance market.”
The increasing number of product recalls in Asia show that the region is playing a larger role in global supply chains.
According to Alfred Shum, regional head of Asia-Pacific crisis management at AGCS, there are record levels of recall activity in terms of both size and cost.
“Tougher regulations and harsher penalties, the rise of large multinational corporations and complex global supply chains, plus growing consumer awareness, impact of economic pressures in R&D and production and even growth of social media are just some of the contributing factors behind this,” he said.
