OK Financial Group signs deal to acquire Yebyeol Non-Life Insurance, aiming to become a comprehensive financial group

[The Financial News] OK Financial Group is entering the non-life insurance business by acquiring Yebyeol Non-Life Insurance. Its plan is to add insurance to its existing savings bank and capital finance businesses and grow into a comprehensive financial group.
According to the financial sector on the 8th, OK Financial Group signed a stock purchase agreement (SPA) for Yebyeol Non-Life Insurance with the Korea Deposit Insurance Corporation on the 7th.
Yebyeol Non-Life Insurance is a bridge insurer established to take over the insurance contracts of MG Non-Life Insurance, which the Financial Services Commission designated as a distressed financial institution in 2022. Several attempts to sell the company had failed, but it has now found a new buyer in OK Financial Group.
OK Financial Group plans to make protecting the interests of approximately 1 million policyholders and normalizing the company’s management its top priorities during the acquisition. The group believes that improving solvency indicators early is the first step toward restoring customer trust in the insurance business. It therefore plans to raise key indicators of financial soundness, including the solvency ratio (K-ICS), to levels at or above the standards set by financial authorities, with funding support from the Korea Deposit Insurance Corporation and additional capital of its own.
However, the burden of improving financial soundness has also grown after Yebyeol Non-Life Insurance’s second-quarter disclosures showed a sharp increase in losses.
OK Financial Group expects it will need to inject at least 110 billion won more than initially anticipated, due in part to Yebyeol Non-Life Insurance’s deteriorating performance. It is discussing significantly bringing forward, from its original schedule, the deployment of large-scale investment funds planned for the company’s future normalization.
Having held intensive negotiations through the signing of the stock purchase agreement, OK Financial Group plans to focus on smoothly completing the remaining procedures on the basis of mutual trust with the Korea Deposit Insurance Corporation until the deal closes, a process that typically takes about three months.
In addition, the group plans to immediately form a working-level task force (TF) following the agreement and begin preparations in earnest to normalize management and expand the business. It will also significantly increase staffing to stabilize the organization and shift to an aggressive sales strategy. The group plans to more than double Yebyeol Non-Life Insurance’s workforce, currently about 260 employees, to around 500–600.
Meanwhile, OK Financial Group has decided to maintain its existing position regarding its concurrent bid to acquire JoongAng Ilbo. Although the additional funding required due to Yebyeol Non-Life Insurance’s deteriorating performance has increased the financial burden beyond what was initially expected, the group plans to continue participating diligently in due diligence until a preferred bidder for JoongAng Ilbo is selected.
An OK Financial Group representative said, “We have experience acquiring a distressed savings bank previously managed by the Korea Deposit Insurance Corporation and growing it into the industry’s second-largest player,” adding, “We feel a weighty sense of responsibility for being given another opportunity to contribute to stabilizing the financial market.”
The representative added, “Drawing on OK Financial Group’s unique DNA, which has taken us from an unconventional outsider to the mainstream, we will also establish Yebyeol Non-Life Insurance as a non-life insurer trusted by the market,” and said, “We will continue to grow into a comprehensive financial group spanning savings banking, capital finance and insurance.”
[email protected] Seo Ji-yun Reporter