Hana Financial Group is pushing to inject up to 200 billion won ($144 million) in additional capital into Hana Insurance next year, sources said. Combined with subordinated bond issuance and a rights offering this year, the moves would add a total of 500 billion won in capital over roughly one year. Samsung Life Insurance (032830) is also weighing additional capital injections into its Thai and Chinese units, in what analysts describe as intensifying competition for survival as the domestic market reaches saturation.
A senior financial industry official familiar with Hana Financial Group's situation said on the 3rd that Hana Insurance issued 100 billion won in subordinated bonds in June and carried out a 200 billion won rights offering in July, but that this remains insufficient. "I understand the situation would improve significantly with an additional 200 billion won capital injection next year," the official said. "That is the direction under review."
Hana Insurance's basic capital ratio under the Korean Insurance Capital Standard (K-ICS) stood at 22.43% as of the end of June. Improving capital adequacy is the immediate goal, but industry watchers say the broader state of the domestic insurance market must be considered as well. With demand for new policies slowing structurally amid low birth rates and population aging, insurers have little choice but to grow in scale to respond. South Korea's population aged 65 and over reached 10.72 million last year, or 20.72% of the total.
Samsung Fire & Marine Insurance (000810) is examining a plan to acquire an additional stake in Canopius, a British specialty insurer. Kyobo Life Insurance is weighing an acquisition of AXA General Insurance. KDB Life Insurance and Yebyeol Insurance are also reshaping the landscape, with Korea Investment Holdings and OK Savings Bank respectively pursuing takeovers.
Lotte Non-Life Insurance (000400) and BNP Paribas Cardif Life Insurance are also up for sale. "South Korea's insurance industry is already saturated," a senior insurance industry official said. "That is why foreign players have withdrawn one after another, and sweeping restructuring is needed."
