Insurance Companies' Net Profit in H1 Falls 15% Year-on-Year to 7.98 Trillion Won

Life Insurers' Net Profit at 3.334 Trillion Won, Down 8.5% Year-on-Year
Non-Life Insurers' Net Profit at 4.641 Trillion Won, Down 19.2% Year-on-Year
Decline in Insurance Profit Offset by Investment Gains

In the first half of this year, insurance companies' net profit decreased by 15% compared to the same period last year.

According to the '2025 First Half Insurance Company Business Performance (Provisional)' report released by the Financial Supervisory Service on August 27, the combined net profit of insurance companies (22 life insurers and 31 non-life insurers) was 7.975 trillion won, down 15% (1.4121 trillion won) from the same period last year.

An image depicting the decline in insurance company performance, as described by ChatGPT. ChatGPT

The net profit of life insurers was 3.334 trillion won, a decrease of 8.5% (311.6 billion won) compared to the same period last year. This was mainly due to a decline of 384.6 billion won in insurance profit, the core business, as a result of increased loss burden costs. Investment profit increased by only 7.3 billion won.

The net profit of non-life insurers was 4.641 trillion won, a decrease of 19.2% (1.1005 trillion won) from the same period last year. Although investment profit increased by 657 billion won due to gains from bond valuation and other factors, insurance profit plummeted by 1.9796 trillion won, mainly due to a rise in loss ratios.

Insurance premiums, which correspond to sales, amounted to 124.3823 trillion won, up 8% (9.2547 trillion won) from the same period last year. Life insurance premiums totaled 60.1579 trillion won, an increase of 10.4% year-on-year, driven by higher sales of protection-type insurance, variable insurance, and retirement pensions. However, sales of savings-type insurance declined. Non-life insurance premiums reached 64.2244 trillion won, up 5.9% (3.5705 trillion won) from a year earlier, due to increased sales of long-term insurance, general insurance, and retirement pensions, while auto insurance sales declined. The recent sharp rise in loss ratios for auto insurance has become a major factor eroding insurance profit.

The return on assets (ROA) and return on equity (ROE) of insurance companies were 1.24% and 11.26%, respectively, down by 0.29 percentage points and 0.44 percentage points from the same period last year.

Total assets stood at 1,301.8 trillion won, up 2.6% (32.8 trillion won) from the end of last year. Total liabilities increased by 3% (34 trillion won) to 1,160.7 trillion won.

An official from the Financial Supervisory Service stated, "Despite an increase in investment profit in the first half, insurance companies' net profit decreased compared to the same period last year due to a reduction in insurance profit caused by higher loss burden costs and rising loss ratios. As there are concerns about growing uncertainty in the financial markets, including stock prices, interest rates, and exchange rates, insurance companies need to manage their financial soundness."