Five Insurers Interested in South Korea’s Kumho Life

Kumho Asiana Group, a Korean business conglomerate, is set to negotiate with with five interested insurance groups for the sale of its life insurance subsidiary, Kumho Life Insurance Co. Ltd. [78494] by the end of this year.

The construction and airline-focused Kumho Asiana Group will make a final decision on the sale of Kumho Life to one of the five bidders comprised of both international and local insurers this month, according to spokesperson Min-gyu Kim.

The potential acquisition of Kumho Life by an international insurance group will be an extension of foreign insurers' reach into South Korea's life insurance sector. Kumho Life is ranked fifth or sixth in terms of market share in South Korea's life insurance sector, Kim said.

Kim declined to name the interested insurers.

Kumho Life had a net profit of 26.5 billion won (14.2 million euros) in the first half of fiscal 2008, ending in September, down 58% from last year's 62.6 billion won. The unlisted life insurer reported a 75% increase in premium income to 206 billion won in this first half, according to South Korea's Financial Services Commission.

Kumho Life's ratio of expected cost versus actual cost was 98.62 by September, up from last September's 84.48. The life insurer's return on assets was 7.14% in this year's first half, up from last year's 6.99%.

The Seoul-based Kumho Asiana Group decided to sell its controlling stake in Kumho Life this year in a bid to ease the group's liquidity worries after its acquisition of Daewoo Engineering & Construction.

Kumho Life had planned for an initial price offering in the Korean stock market earlier this year. But the listing has been put on hold due to the possible sale of the life insurer.

(By Iris Lai, Hong Kong bureau manager: [email protected])