[Asia Economy Reporter Oh Hyung-gil] The K Insurance is moving its base from the Teachers' Credit Union to Hana Financial Group and starting anew as Hana Insurance. Kwon Tae-gyun, former Vice President of Hana Capital, who has been appointed as the head of Hana Insurance, revealed his goal to develop it into a digital non-life insurance company. Attention is focused on whether Hana Insurance can establish Hana Financial Group's 'DNA' and create a new success model.
According to the financial sector on the 28th, Hana Financial Group acquired 70% of the shares of The K Insurance and incorporated it as its 14th subsidiary. The day before, a shareholders' meeting was held at the chairman's office of the Korea Teachers' Credit Union in Yeouido, Yeongdeungpo-gu, Seoul, where the company name was changed to 'Hana Insurance.'
The new CEO appointed is Kwon Tae-gyun, Vice President of Hana Capital. After deciding to acquire 70% of The K Insurance's shares in February and receiving approval from financial authorities for subsidiary incorporation last month, the acquisition process proceeded swiftly. This confirmed Hana Financial Group's intention to strengthen its non-bank sector through Hana Insurance.
Hana Financial entered the life insurance business in 2003 by acquiring France Life (now Hana Life), but its market position within the financial holding group remains minimal. Since this is its first entry into the non-life insurance business, it is imperative to achieve results in strengthening the group's non-bank sector through Hana Insurance and Hana Life.
Looking at the premium status by recruitment channel of The K Insurance, there is a high dependence on sales from employees and general agencies (GA). On the other hand, bancassurance through bank counters shows no performance.
While internal expectations for synergy with financial affiliates exist, there are also forecasts that rapid business expansion will be difficult due to the conservative nature of the industry. Some expect a trajectory similar to LIG Insurance (now KB Insurance), which became part of KB Financial Group in 2015.
KB Financial acquired LIG Insurance, which was ranked 4th in asset size in 2015, and launched KB Insurance, but failed to change its ranking. Rather, it appears to be chased by the latecomer Meritz Fire & Marine Insurance without narrowing the gap with top companies. As of last year’s net income, it has fallen to 5th place.
Some speculate that considering the size gap between The K Insurance and Hana Financial, the diversification effect from acquiring The K Insurance will be minimal. Korea Credit Rating Agency analyzed, "The K Insurance recorded a net loss of 44.5 billion KRW last year, making immediate profit contribution difficult," and added, "Considering the deteriorated profitability with a risk-based capital (RBC) ratio of 128% and insufficient capital capacity, capital expansion such as Hana Financial's investment is essential."
Securing new sales channels is also urgent. Last year, out of 500 billion KRW in gross written premiums, 310 billion KRW came from auto insurance, showing high dependence. While it has strengths in telemarketing targeting teachers, its internet sales are relatively weak.
Accordingly, Hana Financial plans to nurture Hana Insurance as a 'digital comprehensive non-life insurer.' An insurance industry insider predicted, "They will expand the product portfolio including long-term protection products excluding auto insurance, while simultaneously securing new sales channels."
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