Hana Financial Group is weighing a further capital injection of up to 200 billion won (US$144 million) into its non-life subsidiary Hana Insurance as early as next year, according to people familiar with the matter cited by Seoul Economic Daily, as the group works to shore up the insurer’s solvency position under South Korea’s tightening capital regime.
The planned injection would follow two capital-raising exercises already completed this year: a 100 billion won subordinated bond issuance in June and a 200 billion won shareholder-allocated capital increase in July, in which Hana Financial Group acquired 40 million new Hana Insurance shares, according to The Asia Business Daily. If the additional injection proceeds, total capital raised for the subsidiary will reach 500 billion won in just over a year.
“Hana Insurance issued 100 billion won in subordinated bonds in June and carried out a 200 billion won capital increase in July, but that is still not enough. I understand the situation would improve significantly with an additional 200 billion won injection next year. That is the direction under review,” a senior financial industry official with knowledge of the group’s situation told Seoul Economic Daily.
Read next: Hana Financial to keep current leadership
The urgency is rooted in Hana Insurance’s position under the Korean Insurance Capital Standard, or K-ICS, South Korea’s risk-based solvency framework introduced in 2023 alongside IFRS 17. K-ICS uses market-based valuation of assets and liabilities and measures required capital at a 99.5% confidence level, broadly comparable with Europe’s Solvency II regime. Insurers are required to maintain a K-ICS ratio of at least 100%, while 130% is used as a supervisory benchmark in certain regulatory contexts, according to the Financial Supervisory Service (FSS).
Hana Insurance’s basic capital ratio under K-ICS stood at 22.43% at the end of June, according to Seoul Economic Daily. That figure takes on added significance given a further regulatory tightening on the horizon. The Financial Services Commission (FSC) announced in January that from 2027, insurers will be required to hold core capital – paid-in capital and retained earnings, explicitly excluding subordinated bonds and hybrid instruments – equal to at least 50% of required capital under a new basic capital K-ICS ratio. Insurers falling between 0% and 50% face a management improvement recommendation; those falling below 0% face a management improvement requirement, according to The Asia Business Daily. An FSC official stated that “insurers with weak basic capital must prepare and submit improvement plans” and that the regulator “will closely monitor the implementation of these improvement plans for each vulnerable insurer.”
The 2027 rule matters directly for Hana Insurance because the capital raises completed this year have relied in part on subordinated bond issuances – instruments that will not count toward the new core capital floor. That structural mismatch is what makes the third injection, if it proceeds using equity-type capital, strategically necessary rather than merely precautionary. Hana Insurance is not alone in this position. Heungkuk Fire & Marine Insurance and iM Life Insurance both carry basic K-ICS ratios below 50%, Seoul Economic Daily reported, placing them in corrective action territory once the 2027 threshold takes effect. “This will inevitably be more disadvantageous for small and mid-sized insurers with limited capacity to raise capital,” an industry official told Seoul Economic Daily.
The capital squeeze at Hana Insurance reflects conditions across South Korea’s insurance sector more broadly. By 2025, South Korea had become a super-aged society, with the population aged 65 and above exceeding 20% of the total – a rate of demographic aging unprecedented globally, according to RGA, citing Statistics Korea data. Life insurance enrolment among people in their 20s and 30s fell to as low as 49.9% in 2023, according to the Korea Insurance Development Institute and the Korea Insurance Research Institute, as cited by Seoul Economic Daily. The domestic market is forecast to grow at just 3.93% per year between 2026 and 2031, according to Mordor Intelligence – conditions that limit organic revenue growth and concentrate pressure on capital management.
Those conditions have prompted wider restructuring. Several foreign carriers – including ING Life, Aviva Life, Allianz Life, PCA Life, Prudential Life, and Cigna – have exited South Korea since 2013, according to Business Korea. More recently, the FSC approved Woori Financial Group’s acquisition of Dongyang Life and ABL Life, while BNP Paribas Cardif Life and AXA General Insurance are in live ownership processes. “The domestic insurance industry is already saturated. That is why foreign players have withdrawn one after another, and sweeping restructuring is needed,” a senior industry official told Seoul Economic Daily.
Larger Korean carriers are responding by deploying capital outward. Samsung Fire & Marine Insurance and Samsung Life Insurance are separately pursuing acquisitions in the UK and US reportedly valued at between US$5.8 billion and US$6.6 billion combined, according to Insurance Business Asia – a contrast that illustrates how the same domestic constraints are producing different strategic responses depending on a carrier’s capital base.
For Hana Financial Group, the more immediate priority is completing the capital work required to bring Hana Insurance’s solvency position into compliance with both existing K-ICS expectations and the 2027 core capital rules. Whether the third injection proceeds, and in what form, will determine how the subsidiary enters that regulatory transition. For insurance professionals placing risk with Korean non-life carriers, the 2027 deadline introduces a practical due diligence consideration: whether counterparty carriers hold sufficient core capital – not just headline K-ICS ratios – to meet the new minimum without triggering regulatory intervention. In a market where several insurers are simultaneously managing capital raises, ownership transitions, and solvency thresholds, counterparty financial soundness warrants closer monitoring than the headline ratio alone may suggest.
