This article was published on ChosunBiz MoneyMove (MM) at 7:26 a.m. on Nov. 15, 2025.
KDB Life Insurance decided on a paid-in capital increase of about 500 billion won. Although it was an unavoidable decision to resolve capital erosion and a low solvency (K-ICS) ratio, industry experts say it will paradoxically make the long-stalled sale of management rights over the past decade even more difficult.
From Korea Development Bank's perspective, the newly injected 50 billion won of public funds can only be seen as the floor price for a sale, while potential buyers may view the company's competitiveness as that much weaker and, considering additional capital that must be injected after acquisition, are likely to offer a conservative valuation. It is a structure in which the gap in expectations between the two sides can only widen.
According to the investment banking industry on the 15th, KDB Life held a board meeting on the 11th and resolved a rights offering of 515 billion won. It decided to issue 103 million common shares at 5,000 won per share. Korea Development Bank, which holds 97.65% of KDB Life's equity, is structured to effectively take responsibility for the entire amount.
This rights offering was decided to improve capital adequacy. KDB Life's shareholders' equity was minus 124.2 billion won at the end of the first half of this year, and the solvency (K-ICS) ratio was 176.6%. However, this figure applies transitional measures; excluding transitional measures, it is only 43.3%. Because it is far below the financial authorities' baseline of 100%, a short-term capital injection is necessary. Transitional measures are a system that temporarily raises an insurer's financial soundness by relaxing the standards for soundness indicators.
The industry estimates that KDB Life will need at least 2.5 trillion won more going forward. Because of the new accounting standard (IFRS 17) and the solvency standard (K-ICS), life insurance companies' capital sensitivity to changes in interest rates or insurance rates has become much greater. When these standards are fully applied, bolstering capital will become an ongoing task. Therefore, KDB Life's potential buyers will inevitably factor the cost of follow-up capital increases into discounts on the acquisition price.
From the seller Korea Development Bank's standpoint, the logic is different. Since it is already injecting an additional 515 billion won of public funds, it is natural that it hopes to recover at least this amount from the sale price. Considering past cumulative support funds, it is natural that the bank's expectations rise. In other words, a tug-of-war is inevitable between Korea Development Bank, which wants to add the additional injected capital to the price, and buyers, who want to subtract future additional capital from the price.
This tug-of-war has occurred several times in the past. Korea Development Bank tried to sell the company six times since 2014, and during the third sale attempt in 2020 it hoped for a sale price of 1 trillion won. However, the potential buyer, private equity firm JC Partners, proposed acquiring it for 200 billion won for old shares plus 150 billion won for new shares (a total of 350 billion won), and the two sides reached the share purchase agreement stage before it collapsed over major shareholder eligibility issues.