Following reports that JC Partners has been selected as the preferred bidder for a takeover of KDB Life in Korea, there has been speculation that the private equity firm could challenge Korean Re’s dominant market share.
According to the The Korea Times, its possible that JC Partners could seek to change KDB Life into a reinsurance firm after closing the acquisition.
Such a move would allow the firm to enter into competition with Korean Re, by taking advantage of recent deregulatory measure in Korea’s reinsurance industry.
Based in Seoul, Korean Re currently controls about 57% of the country’s domestic reinsurance market.
The Financial Services Commission (FSC) has reduced the minimum equity requirement for a reinsurer from 30 billion won (US $25.1 million) to 10 billion won ($8.4 million), and confirmed that reinsurers will not be subject to regulations imposed on general insurers.
“Competition is expected to heat up in the reinsurance market with newly established reinsurance companies,” an FSC official said.
