Life Insurers Asked to List Shares
By Na Jeong-ju
Staff Reporter
Financial Supervisory Commission (FSC) Chairman Kim Yong-duk called on life insurance firms to list their stocks this year, if possible, saying they need to raise more capital from the market to improve their global competitiveness.
``Life insurers needs to become larger and stronger to compete better on the global stage,'' Kim said at a breakfast meeting with CEOs of insurance firms in Seoul.
Kim said the regulator is seeking to ease rules on mergers between insurance firms. The FSC will take measures aimed at promoting mergers between financial companies seeking to diversify their areas of businesses and strengthen competitiveness, he said.
``To help domestic insurers secure international competitiveness, the government will relax mergers and acquisitions rules and support their listing of stocks to help them get bigger and expand their business portfolios,'' the chairman said.
Last month, the Ministry of Finance and Economy said it plans to revise rules to allow insurance companies to provide payment and settlement services similar to banks and securities companies. The revised bill is expected to get parliamentary approval in the first half of the year and go into effect from February 2009, according to the ministry. Customers can pay insurance premiums, receive insurance money, or pay utilities bills through their insurance accounts.
The government is also seeking to allow insurance companies to turn into holding companies. Analysts estimate the measure will open ways for local insurers to grow into global insurance holdings companies such as ING.
``Globalization has become the top priority for life insurers,'' Kim said. ``We will take all possible measures to help them compete better on global markets.''
In line with the Capital Market Consolidation Act and the revision of the insurance business act, a wave of mergers is expected to sweep the insurance industry. As banks will be allowed to sell non-savings linked insurances and auto insurances as well, they expect to create synergy between insurance and banking businesses by having their own insurance arms.
The FSC opened the doors to the bourse for life insurers in April. The regulator believes life insurers will become blue chip stocks in a market where too many investors vie for a limited number of good shares.
Currently, around five life insurers, including Samsung, Hungkuk and the Green Cross Life Insurance meet the conditions for listing.