Kyobo Life Insurance will absorb its digital insurance subsidiary, Kyobo Lifeplanet Life Insurance, 13 years after the unit launched in 2013 as South Korea's first internet-only life insurer.
Kyobo Life's board approved the merger plan at a meeting on the 15th, according to financial industry sources.
The company said the merger is intended to strengthen the competitiveness of its digital insurance business and boost corporate value. Because Kyobo Life holds a 100% stake in Kyobo Lifeplanet, the merger is expected to face few procedural obstacles.
Kyobo Lifeplanet began operations in 2013 as the country's first internet-only life insurer. It drew attention as a digital insurer selling policies primarily online without a face-to-face sales force such as agents, but has struggled to secure profitability amid continued losses since its launch. It posted a net loss of 20.1 billion won last year and another 6.5 billion won in the first half of this year.
Kyobo Life has injected about 365 billion won into the unit across seven rounds of capital support. In March 2024, it carried out a rights offering worth 125 billion won. Despite the repeated capital injections, the subsidiary struggled to build an independent earnings base, leading the parent to choose integration over further capital increases.
The need to reduce the capital burden of maintaining a separate legal entity has also grown, with regulations on the basic own-funds Korean Insurance Capital Standard (K-ICS) ratio, which gauges insurers' capital soundness, set to take effect next year. Carrot General Insurance, a digital non-life insurer, was previously absorbed by Hanwha General Insurance (000370) for similar reasons, including sustained losses and capital pressure.
"This merger is a decision aimed at strengthening the competitiveness of our digital insurance business and enhancing corporate value," a Kyobo Life official said.
