This article was displayed on the ChosunBiz MoneyMove (MM) site at 9:28 a.m. on May 12, 2026.
The Korea Deposit Insurance Corporation (KDIC) is leaning toward holding for the long term, for the time being, the Hanwha Life Insurance equity it owns through the Deposit Insurance Fund Bond Redemption Fund (KDIC bond redemption fund). Although the redemption fund is set to be wound down at the end of next year, there is no need to rush a sale because, at the current share price, it is impossible to reach the break-even point for public funds.
According to the investment banking (IB) industry on the 12th, sentiment within the KDIC is that there is no need to dispose of Hanwha Life Insurance equity aggressively before the KDIC bond redemption fund is liquidated. The KDIC bond redemption fund was established to recover public funds injected during the foreign exchange crisis and, under the current Depositor Protection Act, is scheduled to be liquidated at the end of 2027.
A key reason the KDIC is not immediately moving to sell Hanwha Life Insurance equity is that it is not required to cash out all holdings before the fund is liquidated. Under the current Depositor Protection Act, the KDIC bond redemption fund may, at liquidation, have its remaining property and in-kind assets vested in the Korea Deposit Insurance Corporation (KDIC) or the Public Fund Repayment Fund. Even if the fund is liquidated, the Hanwha Life Insurance equity can be transferred in kind and kept on the books.
Hanwha Life Insurance was reorganized based on Daehan Life, which became distressed during the foreign exchange crisis. The government injected a total of 3.55 trillion won in public funds starting in 1999. To recover those funds, it sold 67% equity to Hanwha Group in 2002 for 1.1 trillion won, and during Hanwha Life Insurance's 2010 listing it additionally disposed of 8.3% equity for 159 billion won, reducing its stake to about 10% currently.
Unrecovered public funds related to the Hanwha Life Insurance equity currently held by the KDIC are estimated at around 1 trillion won. The market believes the share price must reach at least around 11,000 won per share to recover the full amount. However, Hanwha Life Insurance closed at 4,690 won the previous day. That is about 57% below break-even.
The share price trend is also a burden for the KDIC. Hanwha Life Insurance listed on the main board in 2010 with an IPO price of 8,200 won and briefly rose to 9,550 won right after listing, but then entered a long downturn. In 2019, it fell below the 4,000-won level, and in 2020, amid low interest rates and an economic slump, it even dipped below 1,000 won intraday.
The stock later rebounded on expectations for valuation improvement in the insurance sector, but it remains far below the KDIC's hoped-for level. In recent years it has repeatedly fluctuated between the 2,000- to 5,000-won range. Many in the market say a structural re-rating will be difficult.
Limited dividend capacity is also cited as an obstacle to a recovery in the share price. Hanwha Life Insurance has little room for dividends due to the burden of setting aside surrender value reserves. As of the end of last year, 3.6312 trillion won of 7.0853 trillion won in retained earnings was tied up as surrender value reserves. Because of this, it did not pay settlement-of-account dividends for 2024 and 2025 in a row.
From the KDIC's perspective, launching another block deal at the current share price could inevitably reignite controversy over public fund recovery. That said, analysts say if the stock trades in the 7,000-won range, similar to during past block deals, there is room for a partial equity sale.
The industry expects the KDIC is more likely to prioritize a long-term holding strategy over short-term recovery. Even after the redemption fund is wound down, the equity can be transferred in kind and kept, and forcing a sale now would mean accepting both a lower recovery rate and renewed controversy over losses in public funds.
An industry official said, "The KDIC previously sold Hanwha Life Insurance equity via a block deal in the low-to-mid 7,000-won range," adding, "At a minimum, a similar price range would have to be established for it to secure an internal rationale for a sale."