The competition to acquire Lotte Insurance, South Korea's seventh-largest nonlife insurer, is intensifying, with Woori Financial Group recently joining the race.

Woori Financial Group's Chief Financial Official Lee Sung-wook stated Friday that the company is reviewing the acquisition of the insurer "to fortify our competitiveness in the nonbanking sectors." The remarks came during the company's quarterly conference call.

The move represents Woori's effort to reenter the insurance sector after a decadelong hiatus since selling Aviva Life Insurance to DGB Financial Group in 2013. Currently, Woori is the only one among the country's top five financial holding firms without an insurance arm.

However, Lee noted that the group "will not overpay" for Lotte Insurance, indicating that bidding prices currently circulating in the market -- approximately 2 trillion won ($1.45 billion) -- are "not under consideration."

Earlier this week, reports revealed that Woori Financial Group submitted a letter of intent to JP Morgan, the lead advisor managing the sale of Lotte Insurance stakes. Woori intends to conduct due diligence in the coming week to assess the insurer's value as part of its potential acquisition process.

Up for sale is the 77 percent controlling stake held by local private equity firm JKL Partners, which has owned the shares since 2019 when it purchased the amount from Lotte Group for around 730 billion won.

Typically, private equity firms look to exit an investment around the five-year mark, and this timing coincides with Lotte Insurance's record-high annual net profit of about 300 billion won last year, positioning it as an attractive asset for sale, deal watchers noted.

Lotte Insurance's market capitalization stood at 1.95 trillion won based on Friday's closing price. If JKL Partners manages to sell Lotte Insurance at the estimated market value of 2 trillion won, they could achieve a profit of nearly double their investment in just five years.

Reports indicate that JP Morgan and JKL Partners plan to start the final bidding process as early as June, aiming to finalize the sale within the year.

Woori is not alone in expressing interest in Lotte Insurance. Several global private equity firms, including BlackRock, Blackstone and KKR, are reported to be interested. However, two other major financial groups, Hana and Shinhan, that were speculated to enter the bidding, will not be taking part.

In the broader context, Woori Financial Group is actively working to bolster its nonbanking businesses, with its banking arm currently accounting for about 95 percent of all profits. According to Friday's announcement, the group's net profit in the first quarter of this year was 824.5 billion won, among which 789.7 billion won came from Woori Bank.

The finance giant is also considering acquiring a local securities firm, with internet-only Korea Foss Securities identified as a likely candidate.