Kyobo Life Insurance to Absorb KYOBO LIFEPLANET; Merger Expected to Be Completed in April Next Year

[Financial News] Kyobo Life Insurance will absorb and merge with KYOBO LIFEPLANET Life Insurance, an internet-only life insurer. The strategy is to integrate the digital insurance business, which has been operated as a separate entity, into its core operations and accelerate the digital transformation of its insurance business as a whole.
Kyobo Life Insurance said it held a board meeting on the 15th and approved a merger plan to absorb KYOBO LIFEPLANET’s business and personnel. KYOBO LIFEPLANET also approved the merger plan at its board meeting that day.
Because Kyobo Life Insurance owns 100% of the shares, the merger will proceed as a small-scale merger and can be completed through a board resolution without separate approval from a shareholders’ meeting. The merger is expected to be completed in April next year after procedures including approval from financial authorities.
The KYOBO LIFEPLANET brand will be retained after the merger. Kyobo Life Insurance plans to establish an independent business unit, tentatively named the Lifeplanet Business Division, and apply KYOBO LIFEPLANET’s digital capabilities accumulated over more than a decade across its insurance operations, including product development, marketing, customer management and sales channels. Existing customers will be able to manage their insurance contracts through the app and website, while system integration will proceed in stages.
The merger comes amid concerns about the growth and profitability of independent digital life insurers. With capital soundness regulations such as IFRS 17 and the Korean Insurance Capital Standard (K-ICS) becoming stricter, the company has determined that it would be difficult to secure a sufficient long-term profit base, measured by the contractual service margin (CSM), through a business structure focused solely on short-term, small-value and savings-type insurance. It is also difficult to achieve economies of scale and stable profitability through online sales efficiency alone while covering marketing and IT investments and capital requirements.
As of the end of June, KYOBO LIFEPLANET had approximately 230,000 customers and total assets of 527.3 billion won. Its insurance revenue in the first half of this year was 9.1 billion won, and its K-ICS ratio was 162.97%. Through the merger, Kyobo Life Insurance plans to combine KYOBO LIFEPLANET’s digital capabilities with its parent company’s capital, product portfolio and customer base.
A Kyobo Life Insurance official said, "After the regulatory environment in the insurance industry changed, we continuously discussed the best ways to protect customers and decided on the absorption merger. We will combine KYOBO LIFEPLANET’s digital expertise and innovative capabilities with Kyobo Life Insurance’s insurance business capabilities to provide customers with better products and services."
Meanwhile, the growth model for independent digital insurers is being reshaped one after another. Carrot General Insurance was previously absorbed by Hanwha General Insurance, and KYOBO LIFEPLANET has now also been incorporated into its parent company. Analysts say that combining digital technology and data with existing insurers’ capital strength, product development capabilities and customer bases is emerging as a more realistic growth strategy than building digital competitiveness as an independent entity.
[email protected] Hong Ye-ji Reporter