MG Non-Life Insurance Faces Imminent Liquidation
SEOUL, March 13 (Yonhap) – MG Non-Life Insurance Co., grappling with financial difficulties, is on the brink of liquidation following the collapse of a potential acquisition deal.
Meritz Financial Group announced Thursday that it would no longer pursue its bid to acquire the non-life insurer. The decision stems from disagreements with MG Non-Life’s labor union regarding job security.
Meritz Non-Life Insurance Co., a subsidiary of the group, had been selected as the preferred bidder for MG Non-Life Insurance in December.
MG Non-Life Insurance has been up for sale since April 2022 when it was designated a financially weak company by South Korea’s financial regulator.
So far the attempts to sell the insurer have failed. This marks the fourth failed attempt to find a buyer.
The Financial Supervisory Service (FSS), the country’s financial watchdog, reported that MG Non-Life’s financial standing has continued to deteriorate and that it would handle the matter in accordance with established principles and laws.
At the end of September, the insurer’s capital adequacy ratio, a key indicator of a financial company’s stability under the Korean Insurance Capital Standard (K-ICS), stood at 43.4 percent. This is far below the legally mandated threshold of 100 percent. The low capital adequacy ratio underlines its precarious financial position.
The Korea Deposit Insurance Corp., which has been managing the sale of the insurer, has stated that all options, including liquidation, would be considered if Meritz Financial abandoned its takeover bid. MG Non-Life Insurance has approximately 1.24 million policyholders, a significant number of customers who will be impacted by the outcome of the situation.
