Hyundai Marine & Fire Insurance 1Q Net Profit 333.6 Billion KRW... 3.5% Decrease YoY

Hyundai Marine & Fire Insurance's net profit for the first quarter of this year slightly decreased compared to the same period last year. This is attributed to compensation related to the Korea Tire fire and an increase in actual loss amounts.

On the 12th, Hyundai Marine & Fire Insurance announced preliminary results for the first quarter of this year, reporting consolidated sales of 4.2071 trillion KRW and operating profit of 443.1 billion KRW. Sales increased by 17.4% compared to the same period last year, but operating profit decreased by 9.5%. Net profit for the same period also declined by 3.5% to 333.6 billion KRW.

The increase in sales is attributed to new long-term insurance products such as nursing care insurance and expanded sales of insurance products for people with pre-existing conditions. Growth in the online (CM) channel for automobile insurance also contributed.

However, operating profit slightly decreased due to the impact of the accident caused by the fire at the Korea Tire factory in Daejeon. On March 12, a fire broke out at Korea Tire’s Daejeon Plant 2 in Moksang-dong, Daedeok-gu, Daejeon, completely destroying approximately 87,000 square meters of the factory. At that time, Korea Tire announced that it had subscribed to a comprehensive property insurance worth 1.7031 trillion KRW with KB Insurance, Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, and DB Insurance. Although the insurers, including Hyundai Marine & Fire Insurance, had reinsurance to distribute the risk, they inevitably had to bear some insurance payouts, which is believed to have caused a slowdown in performance.

Hyundai Marine & Fire Insurance explained that the decrease in net profit was largely due to a decline in insurance profit and loss caused by an increase in loss amounts across general long-term automobile insurance.

Meanwhile, the contract service margin (CSM) at the end of the first quarter this year was 8.8718 trillion KRW, an increase of 86 billion KRW compared to 8.7855 trillion KRW at the end of last year. CSM is a profitability indicator newly introduced under the new accounting standard IFRS 17 implemented this year, representing the concept of recognizing future profits generated from insurance contracts over multiple years.