Kyobo Life Insurance speeds up creation of holding company

South Korea’s Kyobo Life Insurance Co. is set to establish a holding company by the second half of 2024. The major insurer seeks to raise its corporate value and then attempt an initial public offering, which has been delayed for years. 

The insurer will discuss the foundation of the holding company in a regular board meeting on Feb. 9, the company said on Wednesday.

It is the first time that Kyobo Life, which has considered creating a holding company since 2005, officially announced the plan. Meritz Fire & Marine Insurance Co. is the only insurer in Korea to have created a holding company, founded in 2011.

To establish the holding company, Kyobo Life will spin off shares in its subsidiaries, such as Kyobo Securities Co. Kyobo Lifeplanet Life Insurance Co., Kyobo AXA Investment Managers Co., Kyobo Realco Inc. and others.

Once the holding company is created, Kyobo Life will become the new entity’s subsidiary. The holding firm will issue new shares through rights offerings and buy Kyobo Life’s equity as an in-kind contribution.

The insurer expects the holding company to bring many benefits, such as improvement of its corporate governance, acceleration of long-term growth strategies, diversification of its business portfolio, growth engine development and creation of synergy among affiliates.

Kyobo Life will apply for an IPO once it successfully establishes a holding company. The insurer applied for a preliminary review of its public listing in December 2021, three years after it canceled the IPO plan at the end of 2018 amid disputes with overseas shareholders.

Korea Exchange disapproved of the insurer’s listing last July, citing that the company should stabilize its management. There have been heated feuds between the firm's top shareholder and Chairman Shin Chang-jae and financial investors (FIs), including Singapore's GIC, Affinity Equity Partners, Baring Private Equity and IMM Private Equity, over exit strategies.

Write to In-Hyeok Lee at twopeople@hankyung.com

Jihyun Kim edited this article.