Seoul-headquartered MG Non-Life Insurance’s efforts to secure a new owner have faltered for the third time, highlighting ongoing concerns regarding its financial health.
Despite organizing a final bidding round on Friday, Samjong KPMG, the sale’s lead advisor, confirmed that no bidders participated.
Among the potential buyers were local private equity fund Dayli Partners and US-based JC Flowers, both of which had engaged in the preliminary bidding but did not proceed to the final round.
Under current regulations, only those who participate in the preliminary bidding are eligible to join the final round.
MG Non-Life Insurance ranks as the 10th-largest non-life insurer in South Korea, with JC Partners holding a dominant 95.5% stake. However, the insurer’s troubles deepened when the Financial Services Commission designated it as an insolvent financial institution in April 2022. Consequently, the Korea Deposit Insurance Corporation (KDIC), a state-run entity, assumed control of its public sale auction.
Previous attempts by the KDIC to sell the insurer last year also failed due to a lack of interest, driven by concerns over MG Non-Life’s worsening financial stability.
Financial authorities recommend maintaining a solvency ratio above 150% to ensure capital soundness. In stark contrast, MG Non-Life’s solvency ratio plummeted to approximately 43% in the first quarter of this year, down from 77% at the end of the previous year.
Experts estimate that around $718.6 million is required to stabilize the insurer post-acquisition. Following the most recent unsuccessful sale attempt, the KDIC is now contemplating the liquidation of MG Non-Life Insurance.
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