Samsung Fire & Marine Insurance Pursues Full Subsidiary Status for UK’s Canopius [fn Market Watch]

[Financial News] Samsung Fire & Marine Insurance is pursuing a plan to more than double its existing 40% stake in UK specialty insurer Canopius and make it a wholly owned subsidiary. Samsung Life Insurance has also begun seriously expanding overseas, considering the acquisition of a stake in a U.S. insurer. Samsung’s financial affiliates appear to be actively exploring overseas mergers and acquisitions, using an expected dividend of approximately 3 trillion won from Samsung Electronics as a springboard.
According to investment banking and insurance industry sources on the 3rd, Samsung Fire & Marine Insurance is reportedly negotiating with a consortium led by Centerbridge Partners, the U.S.-based private equity fund manager and largest shareholder of Canopius, to increase its stake in the insurer.
Samsung Fire & Marine Insurance secured a 40% stake in Canopius and board seats through three investments in 2019, 2020 and 2025, totaling 1.2 trillion won. The additional purchase of part of the remaining 60% stake is estimated to cost approximately 2 trillion won, including a control premium.
Canopius is the world’s fifth-largest company in the Lloyd’s specialty insurance market, specializing in coverage for terrorism, kidnapping, lost artwork and war-related claims. Its return on equity is in the 20% range. Samsung Fire & Marine Insurance earned 168.5 billion won in equity-method income from its existing investment in the first half of this year, accounting for 12.3% of its total net profit of 1.3723 trillion won. If its stake rises to 100%, equity-method income is expected to more than double.
Samsung Life Insurance is reportedly considering acquiring a stake in U.S. retirement-services specialist Principal Financial Group (PFG). The move is interpreted as a strategy to overcome stagnant growth in Korea’s life insurance market by expanding overseas asset management and retirement pension businesses.
Lee Wan-sam, chief financial officer of Samsung Life Insurance, previously said at the company’s first-half earnings presentation last month that it was actively seeking M&A opportunities not only in emerging Asian markets but also in developed markets such as the United States.
An investment banking industry source said, "If Samsung Fire & Marine Insurance secures a 100% stake in Canopius, it will have much more room to maneuver in terms of underwriting strategy and capital allocation. However, the method of acquiring the remaining stake has not yet been decided."
[email protected] Kang Gu-gwi Reporter