Resolution of Carrot's Financial Issues After Merger
"Synergy Creation Through Both Companies' Unique Strengths"
On May 2, Hanwha General Insurance announced via a public disclosure that its board of directors had resolved to merge its subsidiary, Carrot General Insurance, through an absorption-type merger. The company plans to secure a new growth engine by attracting Carrot's "2030 digital" customer base through the merger.
The merger ratio between the two companies is set at 1 Hanwha General Insurance share to 0.2973564 Carrot General Insurance shares. The per-share valuation used as the basis for the merger ratio is 17,053 won for Hanwha General Insurance and 5,071 won for Carrot General Insurance. The merger date is scheduled for September 10. Last month, Hanwha General Insurance acquired 25,864,084 shares of Carrot General Insurance for approximately 205.6 billion won.
Hanwha General Insurance explained that the impact of the merger on its financial soundness would be limited. Carrot General Insurance has posted net losses for three consecutive years. Hanwha General Insurance stated that, since it has already reflected Carrot's profit and loss in its consolidated financial statements, the merger itself would not increase its financial burden.
On the contrary, the company believes that the synergy between the two firms from a business perspective will outweigh any cost burdens. As the first digital-only non-life insurer in Korea, Carrot has built a strong customer base and high digital capabilities in the online market over the past six years, which Hanwha expects will further strengthen its growth momentum.
The company also sees opportunities to expand its business by establishing sales channels spanning face-to-face, telemarketing (TM), and cyber marketing (CM), as well as by launching a variety of products.
Since Carrot's launch in 2019, Hanwha General Insurance has focused on face-to-face and TM channel sales. The company expects that, with the merger, Carrot's 2030 digital customer base will immediately be integrated into its own customer base.
Hanwha General Insurance expects that, by offering its flagship long-term insurance products such as "Signature Women's Health Insurance" on Carrot's digital platform, it will be able to secure additional high-quality contracts from younger customers.
From a cost perspective, the company expects to achieve integration of customer service functions, reduction of overlapping and outsourcing expenses, and greater efficiency in IT system operations. As a result, it aims to reduce Carrot's current automobile insurance combined ratio, which stands at around 120%, to below 100% within two years.
A Hanwha General Insurance representative stated, "This merger was decided as the best option with the utmost consideration for our shareholders' value," adding, "We will strengthen our competitiveness by securing new growth engines, including the development of new insurance service models."
A Carrot General Insurance representative commented, "Through the merger, we will be able to leverage Hanwha General Insurance's extensive experience, nationwide network, and advanced claims management system," and added, "Existing Carrot customers will also experience more stable and reliable services, as well as a wider range of products and benefits, based on Hanwha General Insurance's infrastructure."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
