Insurance Companies' Strong Performance Continues in Q3... 'IFRS17 Guide' as a Variable

Meritz Fire & Marine Insurance Q3 Cumulative Net Profit 1.4928 Trillion KRW
Hanwha General Insurance 345.7 Billion KRW...Increase in Female Insurance Sales
Hanwha Life and Tongyang Life Also Show Year-on-Year Net Profit Growth

Domestic major insurance companies, which recorded historic performances in the first half of this year, are continuing their strong results in the third quarter as well.

According to the financial sector on the 14th, Samsung Fire & Marine Insurance's third-quarter consolidated net profit was 554.1 billion KRW, a 29.4% increase compared to the same period last year. The cumulative net profit for the third quarter reached 1.8689 trillion KRW, up 13.7% year-on-year. Following a record high net profit of 1.3124 trillion KRW in the first half of this year, Samsung Fire & Marine Insurance led performance growth again in the third quarter. A Samsung Fire & Marine Insurance official explained, "Compared to last year, performance in the automobile insurance sector declined, but domestic and overseas businesses in general insurance grew," adding, "Due to expanded valuation gains from alternative investments, the cumulative investment profit for the third quarter was 2.0986 trillion KRW, a 23.9% increase year-on-year."

Meritz Fire & Marine Insurance's third-quarter standalone net profit was 495.1 billion KRW, a 3.1% increase compared to the same period last year. The cumulative net profit for the third quarter was 1.4928 trillion KRW, up 15.2%. Meritz Fire & Marine Insurance also set a new record with a net profit of 997.7 billion KRW in the first half of this year alone. Due to qualitative growth centered on high-quality contracts, insurance profit and loss for the cumulative third quarter increased by 14% year-on-year to 1.4043 trillion KRW. Investment profit rose 17.8% to 599.8 billion KRW. A Meritz Fire & Marine Insurance official stated, "Since the first quarter of 2022, we have recorded net profits exceeding 200 billion KRW for 11 consecutive quarters," and added, "The solvency ratio (K-ICS) was 256% as of the third quarter, demonstrating excellent results in both profitability and soundness."

Image depicting the rise in insurance company performance drawn by ChatGPT. Provided by ChatGPT

Hanwha Life Insurance's third-quarter consolidated net profit was 59.7 billion KRW, a 67.23% increase compared to the same period last year. However, the cumulative net profit for the third quarter was 727 billion KRW, a 13.94% decrease year-on-year. New contracts increased mainly in high-profit general protection products such as the ‘Signature Cancer Treatment Insurance,’ which strengthens coverage for major cancer treatment costs, and the ‘H10 Health Insurance’ for mildly ill patients and healthy insurance consumers. Hanwha Life's subsidiary and the top corporate agency (GA) in the industry, Hanwha Life Financial Service, also posted strong results with a third-quarter net profit of 29.3 billion KRW. A Hanwha Life official said, "We achieved new contract growth by building a lineup of high-profit general protection products and continuously expanding our organizational scale," adding, "We plan to enhance sales capabilities and continuously launch new products in response to the expanding influence of GAs to improve the company's long-term value."

Hanwha General Insurance's third-quarter standalone net profit was 91 billion KRW, a 77.4% increase compared to the same period last year. The cumulative net profit for the third quarter was 345.7 billion KRW, a 36.3% increase year-on-year, marking a record high. This was influenced by increased sales of women's health insurance, an area where Hanwha General Insurance has strengths. Currently, including comprehensive and simplified insurance, the ‘Signature Women’s Insurance’ accounts for 26.3% of all new contracts. A Hanwha General Insurance official said, "Compared to general products, women's insurance attracts more interest from younger customers and has relatively favorable loss ratios."

Dongyang Life Insurance's third-quarter standalone net profit was 90.4 billion KRW, a 424.1% increase compared to the same period last year. The cumulative net profit for the third quarter was 265.7 billion KRW, up 22.2%. New contracts increased thanks to the popularity of health insurance products such as dementia insurance and cancer insurance launched this year. A Dongyang Life Insurance official said, "We plan to make future-oriented decisions rather than focusing on short-term performance by faithfully reflecting the International Financial Reporting Standards (IFRS 17) guidelines presented by financial authorities," adding, "Through a strategy centered on selling protection insurance, we will establish a stable capital management system and continuously enhance the company's value."

Although insurance companies have been posting strong performances one after another this year, there is a possibility that results may change somewhat at the year-end closing. This is because financial authorities recently announced that they will apply IFRS 17 guidelines from the year-end closing to address the issue of ‘performance inflation’ by insurance companies. An industry insider said, "For insurance companies that sold many no-surrender or low-surrender policies, there may be cases where profits turn into losses," adding, "There will also be significant changes in key financial information such as the Contractual Service Margin (CSM) and K-ICS."