Samsung Fire & Marine Insurance's Net Profit Drops 42% Last Year, "Strengthening Profitability This Year"

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] Samsung Fire & Marine Insurance is focusing on profit generation and sustainability this year to recover its performance.

Samsung Fire & Marine Insurance announced on the 19th that its net profit for last year recorded 609.2 billion KRW, down 42.4% compared to the previous year. Last year, the gross written premium (sales) increased by 3.3% from the previous year to 18.8393 trillion KRW, but profits declined due to higher loss ratio and combined ratio (loss ratio + expense ratio), which represent the ratio of claims paid to premiums received. The combined ratio, which measures insurance business efficiency, rose by 2.5 percentage points from the previous year to 106%.

This year, the company plans to overcome last year's poor performance and lay the foundation for sustainable growth through structural innovation. Bae Tae-young, CFO of Samsung Fire & Marine Insurance, emphasized during the 2019 earnings conference call held on the same day, "We are creating a sustainable growth model through investments and management structure innovation, such as establishing a digital non-life insurance company in partnership with Kakao and jointly managing the US and Asian markets with Canopius in the UK."

Samsung Fire & Marine Insurance is promoting the establishment of a digital non-life insurance company in the form of a joint venture with Kakao. They expect to complete the preliminary approval application next month and anticipate obtaining the final approval and starting operations within the year. The main target is the 20s and 30s age group, focusing on the lifestyle-oriented mini insurance market.

Additionally, last year, they completed equity investment in Canopius, a Lloyd's company in the UK, and began discussions to jointly pursue business in the Asian and US markets. Canopius is currently pursuing the acquisition of the Lloyd's business division of AmTrust in the US, and if successful, profits are expected to increase.

Samsung Fire & Marine Insurance expects improved performance this year through strengthened loss ratio management of indemnity health insurance and automobile insurance. For indemnity health insurance, they plan to manage the loss ratio by strengthening underwriting. For automobile insurance, the loss ratio is expected to improve due to system improvements such as a reduction in the number of car accidents and an increase in the burden for drunk driving accidents.

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