Kyobo Life to absorb online insurer LifePlanet, merger to close in April

Kyobo Life said Tuesday it will absorb its online life insurance subsidiary Kyobo LifePlanet Life Insurance, known as LifePlanet, through a merger.

Kyobo Life held a board meeting Tuesday and approved a resolution to absorb LifePlanet's existing business operations and staff. LifePlanet's board passed the same merger resolution that day.

Because LifePlanet is a wholly owned subsidiary of Kyobo Life, the transaction qualifies as a small-scale merger under Korean law, allowing board approval to substitute for a shareholder vote. Kyobo Life plans to complete the merger in April next year after filing for regulatory approval with financial authorities.

After the merger, LifePlanet customers will be able to continue managing their insurance policies and services through the existing app and website without interruption. System integration will proceed in stages.

Kyobo Life plans to establish an in-house independent unit tentatively called the LifePlanet Division and will continue using the LifePlanet brand. The intent is to apply the digital capabilities LifePlanet has built up — spanning product development, marketing, customer management and sales channels — across Kyobo Life's broader insurance operations.

Kyobo Life said that as the spread of AI and other new technologies increases the burden of technology and infrastructure investment on insurers, consolidating capabilities within the group would be more capital-efficient than keeping LifePlanet as a separate legal entity.

The merger was also driven by changes in the regulatory environment, including the introduction of the new accounting standard IFRS17 and the Korean Insurance Capital Standard, known as K-ICS. Under tightened capital adequacy rules, the company said, a standalone digital insurer cannot easily sustain growth. Short-term, small-value and savings-type insurance products — the mainstay of digital life insurers — are insufficient to secure an adequate contractual service margin or maintain a stable K-ICS ratio, Kyobo Life said.

Founded in 2013, LifePlanet was South Korea's first exclusively online life insurer. As of the end of June, it had roughly 230,000 customers and total assets of 527.3 billion won ($392 million). Insurance revenue for the first half of this year came to 9.1 billion won, and its K-ICS ratio stood at 162.97 percent.

"After the regulatory environment for the insurance industry changed, the board held multiple discussions to find the best way to protect customers, and ultimately decided on an absorption merger," a Kyobo Life official said. "We will work to ensure that existing customers' policies and services remain stable throughout the integration process, maximizing the benefits of customer protection."

Meanwhile, LifePlanet has posted a net loss every year since its founding in 2013 — 13 consecutive years of losses. Its net loss last year was 20.1 billion won, and its accumulated deficit stands at around 220 billion won. Kyobo Life has injected 337 billion won through six rounds of paid-in capital increases, including a record 125 billion won increase in March 2024.