DB Insurance to Establish Asset Management Corporation in New York, USA

Application for Establishment Approval to the Financial Supervisory Service
Seeking New Investment Destinations in the Zero Interest Rate Era
Strengthening Overseas Investment Capabilities

[Asia Economy Reporter Oh Hyung-gil] DB Insurance is expanding into New York, the U.S. mainland, following its presence in Guam and Hawaii. In the era of zero interest rates, the company aims to explore new overseas investment destinations and use this as a stepping stone to enhance the performance of its overseas asset management.

According to the insurance industry on the 9th, DB Insurance recently decided at its board meeting to convert its representative office operating in New York into a corporate subsidiary and has applied to the Financial Supervisory Service for approval to establish an overseas corporation. This will be DB Insurance’s first overseas corporation, as it currently operates branches in Guam and Hawaii.

Through the New York corporation, DB Insurance plans to gather new information on asset management, understand trends in the local investment industry, and strengthen its overseas investment capabilities.

Of DB Insurance’s total managed assets of KRW 37.397 trillion, overseas assets account for KRW 8.043 trillion, representing 21.5%. Along with bonds (KRW 15.61 trillion) and loans (KRW 11.073 trillion), overseas assets are considered a major investment sector. Overseas assets have been on the rise, increasing from KRW 6.353 trillion at the end of 2018 to KRW 7.923 trillion at the end of last year, a sharp increase of 26.6% over the past two years.

As of the end of March, the company manages USD 6.38 billion, approximately KRW 7.6 trillion, in overseas bonds, real estate, stocks, and funds. The proportion of corporate bond investments reaches 82%. Investments also include structured bonds, stocks, mixed funds, and absolute return funds.

Investment performance is also on the rise. Of DB Insurance’s investment return rate of 3.51%, overseas investment returns account for 3.61%. This is an increase of 0.56 percentage points compared to 3.05% in the same period last year. In the first quarter alone, overseas investment returns amounted to KRW 71.6 billion, a 43.4% increase compared to the same period last year.

In particular, with the recent passage of the amendment to the Insurance Business Act in the National Assembly last month, which raised the overseas investment limit for insurance companies from 30% to 50%, DB Insurance’s overseas investment scale is expected to increase further.

DB Insurance is also accelerating its global expansion. In June last year, DB Insurance acquired management rights of three Century Insurance Companies (CIC) operating in Guam, Saipan, and Papua New Guinea. The company has completed overseas direct investment reporting and obtained local permits, planning to finalize the acquisition by the end of the year.

A DB Insurance official said, "As the domestic low-interest rate trend continues for a long time, the proportion of overseas investments is steadily increasing, making overseas asset management capabilities more important," adding, "We are promoting the establishment of a corporation to strengthen overseas investment capabilities and improve management efficiency."

This content was produced with the assistance of AI translation services.