Shinhan Financial Group acquires BNP Paribas Cardiff Insurance… Sooner or later, the authorities are likely to request approval of the incorporation of the subsidiary

Shinhan Financial Group has decided to acquire BNP Paribas Cardiff Non-Life Insurance, a foreign insurance company. It has been three years since the acquisition of Orange Life in 2018 to strengthen life insurance. As Shinhan Financial has not owned a non-life insurance company in the past, this acquisition will provide a portfolio of all financial industries.

According to the financial industry on the 31st, Shinhan Financial Group signed a stock purchase agreement (SPA) for BNP Paribas Cardiff Insurance and BNP Paribas Group of France on the 29th.

Shinhan Financial Group decided to acquire a 95% stake in Cardiff Insurance owned by French BNP Paribas Cardiff Group for 40 billion won. The remaining shares are already held by Shinhan Life Life, a joint venture of Cardiff Insurance.

Cardiff Insurance entered the domestic market in 2014 when BNP Paribas acquired Ergodaum Direct Non-Life Insurance. As of the first half of this year, as a small and medium-sized general non-life insurer with assets of 108.4 billion won and liabilities of 48 billion won, it has mainly dealt with corporate and special insurance. Shinhan Financial Group, which had a strategic relationship with BNP Paribas Group, invested a stake through its subsidiary Shinhan Life Insurance at the time. Shinhan Life Insurance’s stake, which was 9.99% at the time of its inception, fell to 7% as of the end of last year due to the absence of a rights offering.

It is interpreted that Shinhan Financial Group acquired Cardiff Insurance to acquire a non-life insurance business license. Currently, the authorities are no longer issuing general non-life insurance licenses due to intensifying competition in the industry. To start a non-life insurance business, it is necessary to establish a digital non-life insurance company or acquire a non-life insurance company with an existing license.

With the signing of this contract, Shinhan Financial Group is expected to request approval from the financial authorities for the incorporation of its subsidiaries in the near future. When a holding company acquires an insurance company, it undergoes approval for incorporation into a subsidiary and approval to change the major shareholder of the insurance company.

An insurance industry official said, “In the case of Shinhan Financial Group, although it is the largest financial group in Korea, the disadvantage is that it has never been in the non-life insurance business.”