Kyobo Life Insurance, South Korea’s third-largest life insurance firm by total assets, announced Tuesday it would seek an initial public offering by the second half of next year to raise capital in the face of new industrywide regulations to gauge capital requirement.
The decision was made during a board of directors’ meeting Tuesday at 11 a.m. in Seoul.
The volume of capital it will seek to raise has yet to be determined, the company added.
(Kyobo Life Insurance)
Kyobo will become the sixth life insurance company to go public on the Korean stock market, following Tong Yang, Hanwha, Samsung, Mirae Asset and Orange Life.
This came months after the July board of directors’ meeting to discuss ways to increase capital buffer, including an IPO, to brace for tougher regulatory standards to measure financial strength of insurers.
Starting in 2021, Korea is poised to implement the new International Financial Reporting Standards, IFRS17, and Korean Insurance Capital Standard, or K-ICS in short, in the place of risk-based capital ratio. The RBC ratio of Kyobo Life Insurance came to 292 percent in September, above a recommended minimum level at 150 percent by Korean financial authorities.
Two investment banking entities -- Credit Suisse First Boston’s Seoul branch and NH Investment & Securities -- will underwrite the IPO. Kyobo said it is in search of more securities firms as an IPO underwriter.
Founded in 1958, Kyobo Life Insurance was Korea’s first insurance company. Its total assets stood at 107.8 trillion won ($95.4 billion) as of end-September.
Chairman and Chief Executive Shin Chang-jae is the largest shareholder, owning 33.78 percent of shares. Major shareholders also include foreign private equity firms. New York-based Corsair Capital owns 9.79 percent and Hong Kong-based Affinity Equity Partners holds 9.05 percent.
By Son Ji-hyoung