Fubon Hyundai Strengthens Financial Soundness... Plans 608 Billion KRW Capital Increase Within the Year

[Asia Economy Reporter Oh Hyung-gil] Fubon Hyundai Life Insurance is set to raise capital worth 608 billion KRW this year. This is a proactive measure in response to continuous asset growth and the introduction of the new International Financial Reporting Standard (IFRS17).

On the 18th, Fubon Hyundai Life Insurance held a board meeting and announced the approval of a total capital increase of approximately 608 billion KRW, including a paid-in capital increase of 458 billion KRW and the issuance of subordinated bonds worth up to 150 billion KRW.

The paid-in capital increase of 458 billion KRW is expected to be completed around July after going through subscription procedures and related processes, while the issuance of subordinated bonds worth up to 150 billion KRW will be gradually implemented by the end of this year depending on market conditions.

This capital increase measure aims to maintain an appropriate solvency ratio and proactively respond to IFRS17 and the new solvency regime (K-ICS) scheduled to be introduced in 2023.

As of the end of the third and fourth quarters of last year (end of September), Fubon Hyundai Life Insurance's total assets reached 17.5 trillion KRW, a 30% increase compared to 13.5 trillion KRW at the end of 2018. Net income also turned positive from a deficit of 61.2 billion KRW in 2017 to a surplus of 48.3 billion KRW in 2018, and grew solidly to 84.3 billion KRW in 2019. The company expects net income in 2020 to exceed the 2019 results. As of the end of the third quarter last year, Fubon Hyundai Life Insurance's solvency (RBC) ratio stood at 210.8%.

In particular, this year Fubon Hyundai Life Insurance plans to maintain the continuous growth of its main channel, retirement pensions, as part of its sales channel strategy. In the bancassurance (BA) channel, it aims to improve profitability by enhancing the product portfolio with a mix of savings and protection products. Additionally, improving efficiency in the telemarketing (TM) channel and qualitative growth in the financial planner (FP) channel have been selected as sales tasks for this year. A relaunch of the corporate sales office (GA) channel is also under consideration.

Meanwhile, Fubon Life, the largest shareholder of Fubon Hyundai Life Insurance based in Taiwan, will have invested over 1 trillion KRW in the Korean market upon completion of this paid-in capital increase. It invested 220 billion KRW in December 2015 and 240 billion KRW in September 2018 into Fubon Hyundai Life Insurance, and in September 2019, it invested 358.5 billion KRW in Woori Financial Group, acquiring a 4% stake in Woori Financial Group.

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