South Korean MG Non-Life Insurance sale fails again

This was its third attempt.

Seoul-headquartered MG Non-Life Insurance's third attempt to find a new owner has failed due to concerns over its financial stability, reported the Korea Herald.

Despite conducting the final bidding on Friday, Samjong KPMG, the lead advisor for the sale, reported no participants showed up.

Potential buyers, including local private equity fund Dayli Partners and US-based JC Flowers, who participated in the preliminary bidding, did not attend the final round. 

Under current law, only companies involved in the preliminary bidding can join the final bidding.

MG Non-Life Insurance, the 10th-largest non-life insurer in South Korea, has JC Partners as its largest shareholder with a 95.5% stake. 

However, after being designated an insolvent financial institution by the Financial Services Commission in April 2022, the state-run Korea Deposit Insurance Corporation (KDIC) took over its public sale auction.

Two previous preliminary biddings held by the KDIC last year also failed due to a lack of interest, attributed to concerns over the insurer's deteriorating financial stability. 

Financial authorities recommend a solvency ratio above 150% for capital soundness, but MG Non-Life's ratio was around 43% in the first quarter of this year, down from 77% at the end of last year.

Approximately $718.6m is needed to normalise the insurer after acquisition. With another failed sale attempt, the KDIC is now considering liquidating MG Non-Life Insurance.