Lotte Insurance Finds New Home at Shinhan After 3 Years Adrift... 'Green Light' for Turnaround

Acquires 77.04% stake held by JKL Partners; plans to acquire remaining shares
Regulatory approval for change in largest shareholder still pending
Plans integration with Shinhan EZ General Insurance; expected to rise to No. 7 in the non-life insurance industry by assets

Lotte Insurance is set to welcome a new owner three years after launching its sale process. The deal comes seven years after private equity firm JKL Partners acquired Lotte Insurance in 2019. Lotte Insurance, which was ordered by financial authorities to improve its management in March due to deteriorating financial soundness, is now being acquired by Shinhan Financial Group, a move expected to accelerate its turnaround.

Shinhan Financial Group said on October 13 that it had signed a stock purchase agreement (SPA) to acquire the Lotte Insurance shares held by JKL Partners. The deal covers a 77.04% stake in Lotte Insurance, for a purchase price of KRW 693.3 billion. Shinhan Financial Group plans to acquire the remaining 22.96% stake after completing the necessary procedures, including obtaining regulatory approval. It will then pursue a merger with Shinhan EZ General Insurance.

Lotte Insurance has found a new owner three years after its sale process began. JKL Partners appointed a lead sale manager in 2024 and has since been seeking potential buyers. Woori Financial Group considered acquiring the company that same year, but negotiations fell through after the parties failed to bridge differences over matters including the price. As the sale process dragged on, Lotte Insurance’s management situation worsened amid weak earnings and a deteriorating financial structure. Against this backdrop, the Financial Services Commission ordered Lotte Insurance to improve its management in March and conditionally approved the management improvement plan it submitted in May.

Shinhan Financial Group then emerged as a potential savior. It entered negotiations after submitting a letter of intent to acquire Lotte Insurance in June this year, but talks were suspended once in August due to differences over the sale price and other matters. The deal was finalized after the two sides subsequently reached an agreement. However, the acquisition cannot be completed until the parties go through the remaining procedures, including regulatory approval of the change in the largest shareholder.

The acquisition has raised hopes for Lotte Insurance’s management recovery. Shinhan Financial Group is expected to inject additional capital after the acquisition to improve the company’s financial soundness.

The expected benefits of integrating Lotte Insurance with Shinhan EZ General Insurance, Shinhan Financial Group’s non-life insurance affiliate, are also drawing attention. Shinhan EZ General Insurance has remained in the red since its launch, recording a net loss of KRW 18.2 billion in the first half of this year. Lotte Insurance, by contrast, has about 3.34 million customers and held approximately KRW 2.2 trillion in insurance contract service margin (CSM) as of the end of the first half of this year. If Shinhan EZ General Insurance joins forces with Lotte Insurance, whose assets total about KRW 14 trillion, it would immediately rise to seventh place in the non-life insurance industry by assets. Shinhan EZ General Insurance’s assets total KRW 340.1 billion, among the lowest in the industry.

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