Insurance Companies' Q1 Net Profit Down 11% YoY to 4.8 Trillion Won

Non-life Insurers Increased by 15% but Life Insurers Decreased by 35%

In the first quarter of this year, the net profit of the insurance sector amounted to 4.8443 trillion KRW, showing an 11.1% decrease compared to the same period last year. This was due to a 15% increase in net profit for non-life insurance companies, while life insurance companies experienced a 35% decline.

According to the "2024 Q1 Insurance Company Business Performance" report released by the Financial Supervisory Service on the 23rd, the net profit of insurance companies (22 life insurers and 31 non-life insurers) in the first quarter was 4.8443 trillion KRW, down 11.1% from the same period last year.

First, the net profit of 31 non-life insurance companies in the first quarter was 2.9694 trillion KRW, an increase of 15.4% (396 billion KRW) compared to the same period last year. The insurance profit and loss of non-life insurers increased due to one-time gains such as a decrease in incurred claims liabilities, but investment profit and loss decreased due to financial asset valuation losses.

On the other hand, the net profit of 22 life insurance companies in the first quarter was 1.8749 trillion KRW, a decrease of 34.8% (1.012 trillion KRW) compared to the same period last year. The insurance profit and loss of life insurers slightly increased due to business activities, but investment profit and loss decreased due to financial asset valuation losses caused by rising interest rates.

In the first quarter of this year, the total written premiums amounted to 58.9521 trillion KRW, a decrease of 78.1 billion KRW.

For life insurance companies, sales of protection-type insurance increased by 13.3% compared to the same period last year, but written premiums for savings-type (-9.2%), variable insurance (-2.1%), and retirement pensions (-33.5%) decreased.

For non-life insurance companies, sales of long-term (+4.9%) and general insurance (+10.2%) increased, but written premiums for automobile insurance (-0.3%) and retirement pensions (-4.7%) decreased.

The return on assets (ROA) and return on equity (ROE) of insurance companies in the first quarter of this year were 1.58% and 11.95%, respectively, down 0.27 percentage points and 2.03 percentage points compared to the same period last year.

Total assets and equity capital were 1,222.6 trillion KRW and 157.8 trillion KRW, respectively, down 2 trillion KRW (0.2%) and 8.7 trillion KRW (5.2%) compared to the end of last year. Assets decreased due to a reduction in the valuation of financial assets caused by rising interest rates, and liabilities increased due to the expansion of insurance business activities.

The Financial Supervisory Service stated, "Uncertainties related to interest rate and exchange rate fluctuations continue domestically and internationally," and added, "It is necessary to proactively manage potential losses in domestic real estate project financing (PF) and overseas commercial real estate." Furthermore, it announced, "We plan to strengthen monitoring of profit and loss volatility of insurance companies due to the introduction of new accounting standards and changes in the financial environment, while thoroughly conducting continuous surveillance of major risk factors."