Samsung Insurance Brothers, Overseas Performance 'Complete Transformation'... "Fought Well Despite COVID-19" (Comprehensive)

Samsung Insurance Overseas Subsidiaries Once Underdogs Show Strong Performance
Samsung Life Thailand Subsidiary Sees 15% Operating Profit Growth in Q1
Samsung Fire Europe Subsidiary Increases Operating Revenue by 116%

[Asia Economy Reporter Oh Hyung-gil] Despite the COVID-19 pandemic, Samsung Life Insurance and Samsung Fire & Marine Insurance, the top life and non-life insurance companies in South Korea, are achieving remarkable results in overseas markets. While domestic insurers, facing a saturated insurance market, have turned their attention abroad in search of new growth engines, their performance has generally been unsatisfactory. However, even amid the global economic downturn caused by COVID-19, Samsung insurers are leading the Korean Wave in insurance and laying the groundwork for expanding their global footprint.

According to the insurance industry on the 3rd, Samsung Life’s Thailand subsidiary, Thai Samsung, recorded premium income of 35.3 billion KRW in the first quarter. This represents a 13.1% increase from 31.2 billion KRW during the same period last year. Premium income from mixed life insurance was 21.8 billion KRW, while death and survival insurance premiums were 12 billion KRW and 1.5 billion KRW, respectively. Operating profit grew 15.8% year-on-year to 40.2 billion KRW. This marks the third consecutive year of profitability since 2017.

The Thai insurance market has been expanding, with an average annual premium income growth of 4% over the past five years. The core of Thai Samsung’s insurance sales strategy is its agent channel. The annual premium equivalent (APE) of new contracts through Thai Samsung’s agent channel has grown at an average annual rate of 15% over the past five years. The number of agents registered with Thai Samsung is 7,819, more than double the 3,156 agents in 2014, five years ago.

Jung-Eun Samsung Insurance, in which Samsung Life holds a 25% stake, also posted strong first-quarter results. Operating profit during this period was 382.1 billion KRW, a 47.3% increase from 259.3 billion KRW in the same period last year. Net profit rose from 2.8 billion KRW to 3.6 billion KRW. Jung-Eun Samsung aims to become a mid-sized life insurer based on the bancassurance channel of its major shareholder, the Bank of China.

Not to be outdone, Samsung Fire & Marine Insurance’s overseas subsidiaries, considered the younger sibling of Samsung Life, have also been thriving this year. Samsung Fire’s European subsidiary recorded operating revenue of 26.9 billion KRW in the first quarter, a 116.9% increase compared to the same period last year. Net profit, which was only 100 million KRW in the first quarter of last year, surged to 2.2 billion KRW.

During the same period, the Singapore subsidiary achieved net profit of 6.7 billion KRW, turning profitable. Operating profit also grew 59.6% year-on-year to 46.3 billion KRW from 29 billion KRW. The Indonesian subsidiary also made its presence felt. Operating profit there increased 86.9% year-on-year to 13.376 billion KRW. Net profit jumped 155% to 2.254 billion KRW from 884 million KRW in the same period last year.

In the case of the China subsidiary, operating profit decreased 29.5% from 33.2 billion KRW last year to 23.4 billion KRW, but net profit increased 74.3% to 5.7 billion KRW from 3.3 billion KRW in the same period last year. The Vietnam and U.S. management subsidiaries also recorded operating profits of 11.4 billion KRW and 1.1 billion KRW, respectively, representing increases of 50.0% and 37.5% year-on-year.

Although Samsung insurers entered overseas markets early, their performance had been relatively weak compared to domestic operations. They were even regarded as a "sore spot" for failing to keep up with the "Samsung DNA" in overseas business. However, they have performed well despite COVID-19, leading to evaluations that investments poured into overseas markets are bearing fruit.

A Samsung Life official said, "Business results from overseas subsidiaries have gradually appeared in the first quarter of this year," adding, "We plan to expand overseas business focusing on Southeast Asia, which has high growth potential."