Overseas Branches of Domestic Insurers Return to Profitability in 2024
Net Profit Reaches $159.1 Million After Previous Year's Losses
Recovery Driven by Base Effect from Typhoons and Wildfires
It has been reported that overseas branches of domestic insurance companies turned a profit last year. This was due to a base effect stemming from the deficits incurred in 2023 following a series of large typhoons and wildfires.
According to the Financial Supervisory Service on May 7, the net profit for 2024 of 44 overseas branches operated by 11 domestic insurance companies in 11 countries amounted to $159.1 million (approximately KRW 220 billion). In the previous year, they recorded a net loss of $15.9 million (approximately KRW 20.8 billion), but returned to profitability last year.
Life insurers posted a profit of $64 million (approximately KRW 88.5 billion), an increase of $2.2 million (3.5%) compared to the previous year, driven by the expansion of insurance operations.
Non-life insurers recorded a profit of $95.1 million (approximately KRW 131.5 billion), mainly due to the base effect from large-scale incidents. Their net profit increased by $171.2 million (approximately KRW 236.5 billion) compared to the previous year.
In May 2023, Typhoon Mawar hit Guam, followed by the Maui wildfires in Hawaii in August of the same year. These events resulted in losses of approximately $106 million at two branches, which were subsequently recovered.
By region, domestic insurance companies currently operate 27 branches in Asia, 13 in the United States, 3 in the United Kingdom, and 1 in Switzerland. Of the 27 branches in Asia, there are 7 in Vietnam, 5 in Indonesia, and 4 in China.
By business type, there are 33 insurance branches and 11 financial investment branches. Last year, DB Insurance newly acquired stakes in two local non-life insurance companies in Vietnam, increasing the total number of overseas branches by two compared to the end of 2023.
Total assets reached $7.34 billion (approximately KRW 1.014 trillion), up $920 million (14.3%) from $6.42 billion (approximately KRW 887 billion) at the end of the previous year.
Total liabilities amounted to $3.97 billion (approximately KRW 549 billion), an increase of $550 million (16.1%) from the end of the previous year. This was due to an increase in policy reserves as a result of higher contract holdings.
Total capital stood at $3.37 billion (approximately KRW 466 billion), up $360 million (12%) from the end of the previous year. This capital expansion was driven by an increase in net profit and capital injections.
A Financial Supervisory Service official stated, "Financial volatility at overseas branches may increase due to local economic fluctuations and climate change," adding, "We plan to closely monitor the financial soundness of overseas branches and the business progress of newly established branches."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
