Insurance Companies' Cumulative Q3 Net Profit Reaches 13.3948 Trillion KRW, Up 13.2% YoY

Life Insurance Companies 5.3076 Trillion KRW... 12.6% Increase YoY
Non-Life Insurance Companies 8.0907 Trillion KRW... 13.6% Increase YoY

In the third quarter of this year, the cumulative net income of insurance companies increased by more than 1.5 trillion KRW compared to the same period last year.

According to the "Preliminary Business Performance of Insurance Companies from January to September" released by the Financial Supervisory Service on the 26th, the cumulative net profit of insurance companies (22 life insurers and 31 non-life insurers) for the third quarter was 13.3984 trillion KRW, an increase of 13.2% (1.5624 trillion KRW) compared to the same period last year.

An illustration depicting the rise in insurance company performance by ChatGPT. Provided by ChatGPT

By sector, the cumulative net profit of life insurers for the third quarter was 5.3076 trillion KRW, up 12.6% (595.6 billion KRW) from the same period last year. The core insurance business profit improved due to the expansion of protection-type insurance sales, and investment income also performed well due to increased asset management income such as interest and dividends. During the same period, the net profit of non-life insurers was 8.0907 trillion KRW, an increase of 13.6% (966.8 billion KRW). Insurance profit increased due to the expansion of long-term insurance sales, and investment income improved due to increased interest income and gains on financial asset valuations.

The cumulative earned premiums of insurance companies for the third quarter amounted to 170.0949 trillion KRW, up 4.8% (7.7824 trillion KRW) compared to the same period last year. Life insurers recorded 80.8313 trillion KRW, an increase of 5.7% (4.3724 trillion KRW). Premiums for protection-type insurance (13%) and savings-type insurance (4.6%) increased, but premiums for variable insurance (-0.5%) and retirement pensions (-13.2%) decreased. During the same period, the cumulative earned premiums of non-life insurers were 89.2636 trillion KRW, up 4% (3.41 trillion KRW). Premiums for long-term, general, and retirement pensions increased, but premiums in the automobile insurance sector decreased by 1.4%.

The cumulative return on assets (ROA) for the third quarter was 1.44%, up 0.07 percentage points from the same period last year. During the same period, the return on equity (ROE) was 11.35%, an increase of 2.08 percentage points.

As of the end of the third quarter, insurance companies’ total assets stood at 1,257 trillion KRW, and total liabilities were 1,110.3 trillion KRW. Compared to the end of last year, total assets increased by 2.5% (30.7 trillion KRW), and total liabilities rose by 4.9% (52.2 trillion KRW). Equity capital was 146.7 trillion KRW, down 12.8% (21.5 trillion KRW) compared to the end of the previous year.

An official from the Financial Supervisory Service explained, "Insurance and investment profits improved due to the expansion of insurance product sales and increased asset management income. However, liabilities increased and equity capital decreased due to the decline in discount rates for insurance liabilities caused by falling interest rates and regulatory improvements." The official added, "With ongoing risks related to domestic real estate project financing (PF) and overseas commercial real estate, financial market uncertainties are expected to expand in the future. Insurance companies need to proactively manage their financial soundness."