Woori to reenter insurance market after 11-year hiatus

Woori Financial Group headquarters in Jung-gu, central Seoul. (Woori Financial Group)

Woori Financial Group has finalized a deal to acquire Tongyang Life Insurance and ABL Life Insurance, marking its reentry into the insurance sector after 11 years.

The group announced Wednesday that its board of directors has resolved to incorporate Tongyang Life Insurance and ABL Life Insurance as subsidiaries and has signed the stock sale agreements.

Woori will acquire a 75.34 percent stake in Tongyang Life for 1.28 trillion won ($958 million) and the entirety of ABL Life for 265.4 billion won, totaling an investment of 1.55 trillion won in these acquisitions. The price-to-book ratios for the shares are 0.65 for Tongyang Life and 0.3 for ABL Life.

Tongyang Life Insurance is Korea's sixth-largest life insurer by premiums, with approximately 33.3 trillion won in total assets and an annual net profit of 300 billion won as of last year. ABL Life, a prominent midsized player, has 17.7 trillion won in total assets and marked annual net profit of 80 billion won in 2023.

In a statement Wednesday, Woori Financial Group Chairman and CEO Yim Jong-yong emphasized that the acquisitions aim to "enhance the group's portfolio, which has been predominantly focused on banking."

With its banking division accounting for over 90 percent of its profits, Woori Financial Group has been actively seeking to expand its non-banking operations.

On Aug. 1, the firm launched its brokerage arm, Woori Investment & Securities, formed through the merger of Woori Investment Bank and local online brokerage Korea Foss Securities earlier this year.

Having sold Aviva Life Insurance to DGB Financial Group in 2013, Woori has been the only one of the nation's five major banking groups without an insurance arm.

The group has been negotiating with China’s Dajia Insurance Group, the largest shareholder of the two life insurers, for several months. After securing a priority position in acquisition talks via a memorandum of understanding in June, Woori completed due diligence to evaluate the insurers' values and finalized the deals Wednesday.

Once the necessary procedures are completed to incorporate Tongyang Life and ABL Life as subsidiaries, Woori expects to enhance collaboration and synergies within its expanded portfolio of banking, securities, and insurance.

"Today's deals represent the first step in acquiring the insurance companies. With regulatory approvals still required before finalizing the acquisition, we will diligently respond to the upcoming review processes," a Woori Financial Group spokesperson commented.

By Choi Ji-won(jwc@heraldcorp.com)