Renewed Nonghyup Law To Make Big Financial Firms

By Park Sae-jin Posted : March 7, 2011, 11:29 Updated : March 7, 2011, 11:29
With the laws regarding the operations of the National Agricultural Cooperative Federation of South Korea, or Nonghyup, expected to change, the country’s insurance and credit card companies are bracing for the fall ou, The Korea Times reported on Sunday.

The National Assembly is soon to approve the bill for the revision of the agricultural cooperative law that will split Nonghyup into a farming cooperative unit and financial services business.

The Times said that the separation of the financial unit will allow Nonghyup to start an independent insurance business by March next year and its potentially massive customer pool may allow it to challenge the supremacy of the country’s top-three insurers of Samsung Life Insurance, Korea Life Insurance and Kyobo Life Insurance.

Nonghyup is also planning to spin off its credit card unit and launch a new brand called Chaeum Card.
Samsung Life Insurance topped the asset table of life insurers in 2009 with 133 trillion won ($119 billion), followed by Korea Life Insurance and Kyobo Life Insurance, which holds 59 trillion and 54 trillion won, respectively, The Times added.

If Nonghyup, whose assets are estimated at around 30 trillion won, is permitted to enter the market, it would be the nation’s fourth-largest insurer, competitive enough for fight the three leading players.

The Time reported that if Nonghyup card unit spin off is done, it would be big punch to the market.

However, unlike the insurance industry, its current market share is far behind the industry-leading Shinhan Card. Cedit card spin off is not yet decided, Nonghyup offical was qouoted by The Times.

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