Shinhan Financial Group to acquire Lotte Non-Life Insurance for 693.3 billion won, bolstering non-bank business

[Financial News] Shinhan Financial Group Co., Ltd. is moving to strengthen the competitiveness of its non-bank business by acquiring Lotte Non-Life Insurance. It plans to pursue integration with Shinhan EZ General Insurance and improve capital efficiency to consolidate its position as a comprehensive financial group.
On the 13th, Shinhan Financial Group Holdings said it had signed a share purchase agreement (SPA) on the 13th to acquire the stake in Lotte Non-Life Insurance held by JKL Partners.
Shinhan Financial Group will acquire a 77.04% stake in Lotte Non-Life Insurance for 693.3 billion won. After completing the relevant procedures, including approval from the financial authorities, it plans to acquire the remaining 22.96% stake as well. It will then pursue integration with Shinhan EZ General Insurance and invest additional funds to strengthen financial soundness and its operational foundations, while expanding the synergies from the integration.
Lotte Non-Life Insurance is the industry's seventh-largest non-life insurer. It has built its business base over more than 70 years, focusing on long-term protection insurance. The company has about 3.34 million customers, and its insurance contract margin (CSM) stood at about 2.2 trillion won as of the end of the first half of this year.
Shinhan Financial Group plans to expand its business by combining Lotte Non-Life Insurance's existing business base with the group's sales channels and digital capabilities. It also plans to reduce overlapping costs through integration with Shinhan EZ General Insurance and improve management efficiency with a focus on profitability.
After bringing the company fully under its ownership, Shinhan Financial Group will also work to improve its capital structure. This is intended to prepare for regulations on the basic-capital Korean Insurance Capital Standard (K-ICS) ratio, which will be introduced next year.
Shinhan Financial Group expects that as its earnings base expands through integration synergies and a phased normalization of operations, capital efficiency, including return on equity (ROE), will also improve. The acquisition is being pursued by reallocating capital within the group, without raising external funds. Accordingly, the group plans to maintain stable capital ratios, press ahead in earnest with Value-up 2.0, and continue its existing shareholder-return policy consistently.
During the integration, the group will focus on maintaining existing insurance contracts and customer services without disruption. It plans to communicate extensively with frontline personnel, including employees and insurance agents, to promote job security and ensure a smooth integration.
A Shinhan Financial Group Holdings official said, “Lotte Non-Life Insurance is a company with insurance business experience, a customer base and sales capabilities built up over a long period,” adding, “Shinhan Financial Group will build on these strengths with the group’s capital and risk management, customer and digital capabilities to create new growth drivers for its insurance business and lead the group’s sustainable growth.”

[email protected] Seo Ji-yoon Reporter