Settings

ⓕ font-size

  • -2
  • -1
  • 0
  • +1
  • +2

Kyobo Life injects W150 bil. into unprofitable subsidiary

  • Facebook share button
  • Twitter share button
  • Kakao share button
  • Mail share button
  • Link share button
그림1The Kyobo Life headquarters in Seoul / Yonhap
그림1The Kyobo Life headquarters in Seoul / Yonhap
By Jhoo Dong-chan

Kyobo Lifehas decided to pump money into its online insurance subsidiary Kyobo LifePlanet once again. Under the decision, Kyobo Life has financed nearly 150 billion won ($133.7 million) for the company.

Kyobo LifePlanet has fallen short of expectations as it has yet to post a profit since it was established five years ago. Now, concerns are growing that Kyobo Life may have invested too much money in the firm that could end up generating no profit.

According to the Financial Supervisory Service (FSS), Friday, Kyobo LifePlanet will increase capital by issuing new stocks this month.

It will increase by 35 billion won by issuing 7 million shares allocated to shareholders. The issue price is 5,000 won per share.

Kyobo Life has solely participated in its subsidiary's capital increase. Under the latest move, Kyobo Life is expected to fully own its subsidiary.

Kyobo LifePlanet had a starting capital of 32 billion won, and the FSS approved establishing the online insurance subsidiary under the condition of financing at least 106 billion won for the last five years.

The insurer raised its capital three times before the latest one.

It increased 38 billion won worth of capital by issuing new stocks in November 2014, 24 billion won in November 2015 and another 15 billion won in December 2016. In the meantime, Japanese founding shareholder LifeNet Life has never participated in these capital increases.

Kyobo Life Chairman and CEO Shin Chang-jae
Kyobo Life Chairman and CEO Shin Chang-jae
Kyobo Life Insurance Chairman Shin Chang-jae vowed to turn the subsidiary to profit in five years, but Kyobo LifePlanet has yet to post a profit.

"We believe Kyobo LifePlanet will turn a profit by 2021," a Kyobo Life officialsaid.

"For an insurance company, it takes time to post a profit. It took starting capital when it was established, but took some time to collect premiums. We still believe the company is very promising since its operation is online- and mobile-based."

Kyobo LifePlanet posted a 5 billion net loss in 2013, 16.7 billion in 2014, 21.2 billion won in 2015, 17.5 billion won in 2016 and 18.7 billion won in 2017.

It is likely to post a loss for last year since it already posted a 12.8 billion won net loss in the January-to-September period.



Jhoo Dong-chan jhoo@koreatimes.co.kr


X
CLOSE

Top 10 Stories

go top LETTER