[Asia Economy Reporter Oh Hyung-gil] As KB Financial Group embraces Prudential Life Insurance, financial holding companies are expanding their entry into the insurance sector.
Recently, as foreign insurance companies have been transferring their affiliations to financial holding companies one after another, attention is also focused on whether financial holding companies will continue to write success stories in acquiring insurance companies. The key issue is whether they can generate synergy through integration with affiliates.
According to the insurance industry on the 29th, KB Financial received approval from the Financial Services Commission on the 26th to incorporate Prudential's subsidiary. Accordingly, KB Financial plans to pay the acquisition price on the 31st and incorporate Prudential Life Insurance as its 13th subsidiary.
KB Financial, which owns KB Life Insurance, plans to operate Prudential Life Insurance as an independent legal entity without merging even after incorporation.
The two companies have different sales strengths. Prudential Life Insurance has an advantage in exclusive sales organizations, while KB Life Insurance is specialized mainly in bancassurance based on KB Bank. This is interpreted as an intention to allow each to maximize its strengths while buying time for organizational stabilization before a merger.
In the mid to long term, KB Financial intends to increase its market influence in the life insurance sector through Prudential Life Insurance. It plans to utilize Prudential Life Insurance's LP organization as a "Mobile Wealth Manager" to provide various premium services in asset management.
Additionally, it is preparing group-level customized asset management (WM) services targeting Prudential Life Insurance's 650,000 customers, who have a high proportion of high-income clients.
Furthermore, an external professional manager will be appointed as the new CEO of Prudential Life Insurance. Min Ki-sik, CEO of DGB Life Insurance and former vice president of Prudential Life Insurance, has been selected as the new CEO candidate.
It was explained that he was judged to be the right person to lead structural changes and innovation while maintaining the strengths Prudential Life Insurance possesses, based on his diverse experience in the insurance industry, strategic understanding, and sense of balance.
Recently, financial holding companies are putting their lives on the line to strengthen their insurance businesses.
Hana Financial Group, which embraced Hana Insurance (formerly The-K Non-Life Insurance) as its 14th subsidiary last April, is working to transform Hana Insurance into a digital non-life insurer.
Last month, it improved financial soundness by conducting a paid-in capital increase worth 180 billion KRW, and recently has been accelerating the finalization of internal IT and digital infrastructure construction and personnel recruitment.
Shinhan Financial Group is also seeking to expand synergies between Shinhan Life Insurance and Orange Life, which are scheduled to launch an integrated entity in July next year.
They are preparing for the merger by exchanging personnel between the two companies and coordinating work between organizations. Shinhan Life Insurance plans to strengthen its insurance sales capabilities by newly establishing a subsidiary-type corporate agency (GA).
An insurance industry official said, "Financial holding companies are putting more effort into strengthening their insurance competitiveness by adding insurance to portfolios that were concentrated in banking," and added, "Although insurance companies are experiencing sluggish business conditions, they are expected to fully demonstrate their advantages within financial groups."
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