Samsung Life Insurance "Pursuing Equity Investment in Leading Southeast Asian Insurers... April Guaranteed Interest Rate Down"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Samsung Life Insurance is set to invest in stakes of leading insurance companies in Southeast Asian countries such as Vietnam and Indonesia within this year to secure new growth engines.

Yoo Ho-seok, Chief Financial Officer (CFO) of Samsung Life Insurance, stated during the Samsung Life Insurance earnings announcement conference call on the 18th, "We are exploring investment opportunities including new domestic and overseas equity investments, and we will strive to achieve visible results within this year or by next year."

Yoo added, "The investment cases in Samsung Asset Management and SRA Asset Management, which Samsung Life had invested in, were domestic equity investments but successful stories. We will do our best to discover third and fourth success stories."

Along with this, Samsung Life plans to promote equity investments in leading digital platforms in Southeast Asia in connection with a strategic fund (CVC) worth 50 billion KRW.

In particular, by utilizing the strategic fund, they plan to identify promising investment destinations not only in insurance and asset management but also in overseas business, healthcare, and new technologies.

Yoo stated, "We clearly recognize that maintaining the past management stance makes it difficult to overcome surrounding environments such as competition, low interest rates, and negative growth," adding, "To overcome the current crisis, we intend to focus on aggressive and proactive discovery of new growth engines."

Additionally, Samsung Life Insurance will lower the assumed interest rate on its main whole life insurance products by 0.25% (25 basis points) starting April 1. The assumed interest rate is the expected rate of return that an insurance company can generate by managing the premiums received from customers.

Since the amount of insurance benefits to be returned to customers varies depending on the expected rate of return, the higher the assumed interest rate, the cheaper the insurance premiums, and the lower the assumed interest rate, the more expensive the premiums become. Industry sources say that lowering the assumed interest rate by 0.25 percentage points will increase premiums by 5 to 10%.

However, Samsung Life Insurance added, "We will strive to achieve an effect of lowering more than 25 basis points through an increase in guarantee fees."

Meanwhile, Samsung Life Insurance recorded a net profit of 977.4 billion KRW last year, a 41.3% decrease compared to 1.6644 trillion KRW in 2018. Samsung Life explained, "Excluding one-off factors such as the sale of Samsung Electronics shares in the previous year, net profit decreased by 19.2%."

Samsung Life Insurance Net Income Trend

This content was produced with the assistance of AI translation services.