Shinhan Financial Group to Acquire Lotte Non-Life Insurance for KRW 693.3 Billion, Securing 77% Stake

Board approves acquisition of 77% stake
Plans to acquire 100% stake after regulatory approval
Plans to merge with Shinhan EZ General Insurance... "Strengthening non-banking operations"

Shinhan Financial Group has made a surprise acquisition of Lotte Non-Life Insurance, the seventh-largest non-life insurer in South Korea.

Shinhan Financial Group said on October 13 that it had signed a stock purchase agreement (SPA) to acquire the 77.04% stake in Lotte Non-Life Insurance held by JKL Partners for KRW 693.3 billion. The group plans to acquire the remaining 22.96% stake after completing the necessary procedures, including approval from financial authorities. Based on a 100% equity valuation, the total deal is worth about KRW 900 billion. Shinhan Financial Group held a board meeting that morning and approved the acquisition.

Shinhan Financial Group and JKL had negotiated the sale of Lotte Non-Life Insurance through July 2026, but the talks broke down over a difference of opinion on the purchase price. JKL later pursued a public sale but failed to find a buyer, while Shinhan Financial Group remained committed to the acquisition. The two parties are said to have reached a deal in last-minute negotiations.

Lotte Non-Life Insurance is a mid-sized non-life insurer with about 3.34 million customers. Over more than 70 years, it has built a business base centered on long-term protection insurance. Its insurance contract service margin (CSM) stood at about KRW 2.2 trillion at the end of the first half of 2026.

Shinhan Financial Group said it pursued the acquisition to strengthen its non-banking portfolio, particularly its non-life insurance capabilities. Shinhan EZ General Insurance is already part of the group, but its assets are limited to about KRW 340.1 billion.

Shinhan Financial Group plans to make Lotte Non-Life Insurance a wholly owned subsidiary and then merge it with Shinhan EZ General Insurance. It aims to create synergies by combining Lotte Non-Life Insurance's customer and business base with the group's sales channels and digital capabilities. The group expects the merger with Shinhan EZ General Insurance to reduce overlapping costs and improve operational efficiency with a focus on profitability.

As part of this process, Shinhan Financial Group plans to inject additional capital to improve the capital structure and prepare for regulations on the basic capital-based solvency ratio (K-ICS), which will take effect in 2027.

During the integration, the group also plans to maintain existing insurance contracts and customer services without disruption, and to communicate sufficiently with front-line employees, including staff and insurance agents, to support job security and a smooth transition.

The acquisition will be funded by reallocating the group's existing capital, without external financing. Shinhan Financial Group expects that expanding its earnings base through integration synergies and a phased normalization will also improve capital efficiency, including return on equity (ROE). The group plans to pursue "Value-up 2.0" on the strength of its stable capital ratios while consistently maintaining its existing shareholder return policy.

A Shinhan Financial Group official said, "Lotte Non-Life Insurance is a company with longstanding insurance business experience, a substantial customer base, and strong sales capabilities. We will combine these strengths with the group's capital and risk management, customer, and digital capabilities to create a new growth engine for the insurance business and drive the group's sustainable growth."

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