First Quarter 'Record High' Performance from Non-Life Insurers... Shareholder Returns Expectations Rise (Comprehensive)

Samsung Fire & Marine Insurance Net Profit 702 Billion KRW
DB Insurance 580 Billion KRW... Hyundai & Meritz Also Near 500 Billion KRW
Strong Performance in Long-Term Insurance... Auto Insurance Continues Profitability

Major domestic non-life insurance companies posted record-breaking quarterly results in the first quarter of this year. They secured stable profits in long-term insurance and maintained a profitable trend in automobile insurance. Some insurers, including Samsung Fire & Marine Insurance, announced shareholder return policies, buoyed by confidence in their performance.

Non-life Insurers Achieve 'Record-Breaking' Quarterly Results One After Another

Samsung Fire & Marine Insurance announced on the 14th that its consolidated net profit for the first quarter of this year was preliminarily estimated at approximately KRW 702 billion, marking the highest quarterly performance ever. This represents a 14.6% increase compared to the same period last year.

During the same period, sales rose 3.1% to KRW 5.5068 trillion, and operating profit increased 7.8% to KRW 897.1 billion.

Long-term insurance underwriting profit grew 6.3% year-on-year to KRW 446.2 billion, thanks to increased amortization gains of the Contractual Service Margin (CSM) and stable management of the difference between expected and actual claims (experience variance). The total CSM reached KRW 13.712 trillion, up KRW 409.2 billion compared to the end of last year. This was the result of strengthening product and channel competitiveness, expanding new contract CSM by 30.6% year-on-year.

Automobile insurance underwriting profit remained positive at KRW 102.5 billion, maintaining a profitable business structure. Despite cumulative rate cuts and intensified sales competition, strategic responses expanded market dominance. Sales expansion focused on high-quality customers and improved expense efficiency were also noted. Kim Jun-ha, CFO of Samsung Fire & Marine Insurance, explained during an online conference call, "Population aging has been verified not to be a negative issue in the health insurance market," adding, "Investment income increased mainly from interest and dividend income."

DB Insurance reported a preliminary net profit of KRW 583.4 billion on a separate basis for the first quarter of this year, a 30.4% increase compared to the same period last year. This is the highest quarterly performance on record. Sales during the same period rose 3.2% to KRW 4.6315 trillion, and operating profit increased 30.6% to KRW 766.6 billion.

Insurance operating profit grew 28.2% year-on-year to KRW 448.4 billion, influenced by stable management of long-term risk loss ratios in long-term insurance.

Automobile insurance operating profit was KRW 94.2 billion, up 1.9% year-on-year. Although the loss ratio increased by 1 percentage point compared to the same period last year, expenses decreased by 4.9%.

Investment income surged 55.9% year-on-year to KRW 203.7 billion, influenced by special dividends from a shipping fund and gains from the fair value measurement of equity-type 'profit or loss on financial assets measured at fair value through profit or loss' (FVPL) assets.

Hyundai Marine & Fire Insurance's separate net profit for the first quarter of this year was preliminarily estimated at KRW 477.3 billion, a 51.4% increase compared to the same period last year. Hyundai Marine & Fire also posted its highest quarterly performance ever. Sales during the same period rose 5% to KRW 4.4401 trillion, and operating profit increased 52.3% to KRW 641.1 billion.

Insurance underwriting profit surged 116.6% to KRW 532.9 billion. Investment income decreased 37.8% to KRW 108.2 billion. However, automobile insurance underwriting profit fell 43.9% year-on-year to KRW 42.4 billion, due to increased claims from seasonal factors such as heavy snowfall in January. A Hyundai Marine & Fire official explained, "Insurance claim experience variance improved in the long-term insurance sector, and CSM amortization income increased. Additionally, liability valuation amounts decreased due to regulatory changes, improving insurance underwriting profit."

Meritz Fire & Marine Insurance's separate net profit for the first quarter of this year was preliminarily estimated at KRW 490.9 billion, a 23.8% increase compared to the same period last year. This is the highest quarterly performance on record.

Sales during the same period rose 7.7% to KRW 2.9129 trillion, and operating profit increased 21.5% to KRW 660.6 billion.

Meritz Fire & Marine cited steady growth in long-term insurance underwriting profit through securing high-quality new contracts and a 35% increase in general insurance underwriting profit compared to the same period last year as key factors behind its strong performance. Investment income rose 42.2% year-on-year to KRW 202.7 billion.

A Meritz Fire & Marine official said, "The profitability-focused sales growth strategy through securing high-quality new contracts since 2015 and long-term soundness management have been effective, leading to continuous performance improvement. Efficient cost management and industry-leading asset management capabilities, which strengthen core business competitiveness, also support the record-high results."

Growing Expectations for Shareholder Returns... Samsung and Meritz to Implement Shareholder Returns

Some non-life insurers that posted record-breaking first-quarter results this year plan to actively return profits to shareholders. Samsung Fire & Marine Insurance announced a mid- to long-term capital policy review plan during a conference call. Samsung Fire & Marine plans to unveil a capital policy plan including shareholder returns as early as August.

Samsung Fire & Marine set a mid- to long-term target shareholder return ratio of 50%. The shareholder return ratio is the sum of dividends and share buybacks divided by net profit. A higher ratio indicates a more shareholder-friendly company. Samsung Fire & Marine's shareholder return ratios over the past three years were 45.5% in 2021, 45.8% in 2022, and 37.4% in 2023. The dividend per share (DPS) was KRW 12,000 in 2021, KRW 13,800 in 2022, and KRW 16,000 in 2023.

Meritz Financial Group also plans shareholder returns based on solid performance. Following the cancellation of KRW 400 billion worth of treasury shares in the first quarter, Meritz Financial Group announced plans to purchase an additional KRW 500 billion worth of treasury shares, aligning with the government's value-up policy.

A Meritz Financial Group official said, "The solid performance in the first quarter amid unstable financial markets was due to Meritz Fire & Marine Insurance and Meritz Securities delivering sound results based on strong fundamentals," adding, "Meritz Fire & Marine will focus on long-term underwriting profit growth through expanding high-quality long-term guaranteed insurance sales."