Several financial holding companies in South Korea are expanding into non-banking sectors, such as insurance and securities.
The Korea Investors Service released a report in December 2019 that said that the low key interest rate and low-growth economic environment have led to unfavourable conditions for bank operations. It said the profitability of banks will drop, which will eventually lead to more interest in expansion in non-banking sectors, reported JoongAng Daily.
For instance, KB Financial Group is among several bidders for Prudential Life Insurance which has been put up for sale, at a price expected to be near KRW2tn ($1.7bn).
Hana Financial Group also is already in the process of acquiring The-K Non-Life Insurance for KRW100bn.
Similar acquisitions have taken place in previous years. In 2015, KB Financial Group acquired LIG Insurance, which has now become KB Insurance. In 2018, Shinhan Financial Group purchased ING Life Insurance, now known as Orange Life Insurance.
Financial holding groups are also eyeing InsurTech ventures.Hana Financial Group recently invested KRW8.5bn in Bomapp, an insurance start-up that offers personalised insurance plans through its affiliates.