[THE INVESTOR] China’s Anbang Insurance Group is reportedly seeking additional investments worth up to 3 trillion won (US$2.67 billion) in Tongyang Life Insurance and Allianz Life Insurance, the two Korean companies it recently acquired, The Bell reported on May 26.

Citing unnamed sources at Financial Supervisory Service, the report said, the Chinese insurance giant and its affiliates have informed authorities of the investment proposal. 

Anbang Life Insurance took over a 42 percent stake in Tongyang for 1.13 trillion won in 2015, while Anbang Group Holdings acquired the entire stake in Allianz for 3.5 billion won last year. The holding company, 100 percent owned by the insurance unit, also owns a 33.33 percent stake in Tongyang.

“Anbang is considering more investments in Tongyang and Allianz ahead of the Korean government’s planned adoption of more tightened regulations for the insurance industry,” an FSS source was quoted as saying in the report.

If the investment plans are confirmed, Anbang will be investing a combined 5 trillion won in the two Korean firms.

Korea plans to adopt the IFRS 17 international financial reporting standards that will replace the current IFRS 4 from 2021. Under the standards, insurance contract liabilities will be calculated as the present value of future cash flows with a provision for risk.

Prior to the full adoption, the local authorities are already tightening related regulations, while insurance firms are securing more funds to boost cash flow.

By Park Ga-young (gypark@heraldcorp.com)