Hanwha Life Insurance Co., South Korea’s second-largest life insurer, is expected to compete with No. 3 industry player Kyobo Life Insurance Co. to take over the local life insurance unit of ING Group, industry sources said Sunday.

The race comes after the board of KB Financial Group Inc., South Korea’s No. 2 banking group, turned down a company plan to take over ING Life Korea on Dec. 18 last year, dealing a blow to the group’s push for business expansion.

The two life insurance giants have begun preparations to bid for ING Life Korea, which is expected to be put up for sale again during the first half of this year.

“I understand that the company is conducting preparatory work for the acquisition of ING Life Korea,” said a senior official at Hanwha Life Insurance.

In a recent regulatory filing, Hanwha Life Insurance said the company is considering taking over ING Life Korea but added that nothing has been finalized.

Last year, Hanwha Life Insurance, formerly Korea Life Insurance Co., dropped a bid for ING’s Korean unit apparently due to the arrest of the group’s chairman.

Industry sources said Kyobo Life Insurance seems poised to toss its hat into the ring since the takeover of ING Life Korea could catapult it into the No. 2 position in the domestic market.

Currently, Samsung Life Insurance Co. is the industry leader with assets of 174.1 trillion won ($161 billion), followed by Hanwha Life Insurance with 73.7 trillion won and Kyobo Life Insurance with 66.7 trillion won. ING Life Korea has assets of 22.5 trillion won.

Global insurance giant ING Group has decided to sell its South Korean subsidiary in a bid to tide over its financial problems. (Yonhap News)

ING Life Korea workers started an indefinite strike in July last year, calling for better working conditions, which included job guarantees after a possible acquisition. Unionized workers ended their nearly five-month strike on Dec. 24, after KB Financial withdrew its takeover plan. (Yonhap News)