Japan’s SBI Holdings is set to increase its stake in Kyobo Life Insurance to 20 percent, becoming the second-largest shareholder of the South Korean insurer.

According to industry sources Thursday, the Tokyo-based financial group is seeking to acquire an additional 11 percent stake from other financial investors, following its purchase of roughly 9 percent in March from private equity firm Affinity Equity Partners.

“SBI acquired about 9.1 percent last month from Affinity and is in the process of purchasing another 11 percent from other financial investors, which would bring its total stake to around 20 percent,” an official familiar with the matter said.

Affinity sold its 9.05 percent stake in a deal valued at 430 billion won ($303 million), effectively ending a protracted dispute with Kyobo Life Chair and CEO Shin Chang-jae.

SBI, short for Strategic Business Innovator Group, is looking to tap Kyobo Life’s digital capabilities to revamp its own insurance business, according to Nikkei's report.

With the latest transactions, SBI’s total investment in the Korean insurer is expected to reach 100 billion yen ($700 million).

Once the deal is finalized, SBI will become Kyobo Life’s second-largest shareholder after Shin and his family, who collectively hold about 36 percent. Should SBI’s stake reach 20 percent, it would trigger the application of the equity method under Korean accounting rules — requiring SBI to incorporate a portion of Kyobo Life’s financials into its own statements.

The latest deals mark SBI’s return to Kyobo Life after a 16-year hiatus. The Japanese group previously held a roughly 5 percent stake between 2007 and 2009.

Despite its earlier exit, SBI has maintained close ties with the Korean insurer. In 2015, the two companies formed a consortium to launch a digital bank and, in 2022, jointly invested in Southeast Asia through a venture capital initiative. Last year, they signed an agreement to deepen collaboration in digital finance.

The Japanese firm's personal connection with Chairman Shin Chang-jae is also notable. Shin’s younger son, Shin Joong-hyun, previously built his career at SBI’s insurance and digital banking units. He now leads the digital strategy division at Kyobo LifePlanet, the company's digital-focused subsidiary.

By Choi Ji-won (jwc@heraldcorp.com)