Hanwha Life and Hyundai Marine & Fire Perform Well Amid 'Low Interest Rates and COVID-19' Challenges... Samsung Fire & Marine Insurance Net Profit Declines (Comprehensive)

[Asia Economy Reporter Oh Hyung-gil] In the first quarter of this year, insurance companies' performance showed mixed results amid a stagnant insurance market due to low interest rates and low growth, compounded by the novel coronavirus disease (COVID-19).

While many insurance operations incurred losses, the results varied depending on the profits earned in the investment sector.

Hanwha Life announced on the 14th that its provisional net profit for the first quarter was 83.9 billion KRW, a 261.48% increase compared to the same period last year.

During the same period, sales reached 8.1409 trillion KRW, and operating profit was 99.8 billion KRW, increasing by 31.95% and 164.57% respectively compared to the same period last year.

Premium income recorded 3.417 trillion KRW, up 7.4% year-on-year despite the market slowdown. General account premium income grew 8.5% year-on-year to 2.568 trillion KRW, driven by expanded sales of protection insurance. Pension and savings insurance also increased to 2.568 trillion KRW.

Total new contract annualized premium equivalent (APE) reached 560 billion KRW, a 4.4% growth year-on-year, supported by strong sales of whole life insurance, CI insurance, and savings insurance.

The solvency margin ratio (RBC ratio), indicating the financial soundness of the insurer, rose by 29.2 percentage points year-on-year to 245.6%, due to gains from available-for-sale securities amid declining market interest rates.

Kim Hyun-chul, CFO of Hanwha Life, said, "We expect the unfavorable management environment for life insurers to continue this year due to increased internal and external volatility caused by COVID-19, low birth rates, and low interest rates. We will continue to pursue profitability-focused strategies across the business and generate solid core insurance profits while managing volatility in secondary gains and losses."

Mirae Asset Life reported a provisional net profit of 25.3 billion KRW on a consolidated financial statement basis for the first quarter, down 9.14% year-on-year. Sales increased by 15.17% to 1.0238 trillion KRW compared to the same period last year, but operating profit fell 23.56% to 29.5 billion KRW.

Samsung Fire & Marine Insurance's provisional net profit for the first quarter was 164 billion KRW, down 28.9% year-on-year.

Sales (gross written premiums) increased by 5.9% to 4.8605 trillion KRW compared to the same period last year, while operating profit decreased by 23.8% to 252.2 billion KRW.

Insurance operating losses rose from 158.2 billion KRW in the first quarter last year to 240.9 billion KRW, while investment operating profit only slightly increased from 489 billion KRW to 493.1 billion KRW during the same period.

The loss ratio was 83.4%, up 0.9 percentage points year-on-year, and the RBC ratio fell from 349.6% to 29.69%.

Hyundai Marine & Fire Insurance posted a provisional net profit of 89.6 billion KRW for the first quarter, a 16.0% increase compared to the same period last year. Sales were 3.4709 trillion KRW, and operating profit was 132.5 billion KRW, up 7.2% and 6.0% respectively year-on-year.

The investment yield rose by 0.3 percentage points year-on-year to 3.61%, increasing investment operating profit from 299 billion KRW in the first quarter last year to 350 billion KRW. The loss ratio increased by 1.1 percentage points year-on-year to 86.3%.

Meritz Fire & Marine Insurance's net profit for the first quarter was 107.6 billion KRW, a 63.6% increase year-on-year. Sales were 2.2224 trillion KRW, and operating profit was 151.7 billion KRW, growing 16.6% and 67.9% respectively compared to the previous year.

The company explained, "Gross written premiums continued to grow, and net profit increased due to cost efficiency improvements."

Hanwha General Insurance recorded a provisional net profit of 33.9 billion KRW in the first quarter, turning to black, while Heungkuk Fire & Marine Insurance posted a net loss of 6.2 billion KRW, turning to red in the first quarter.

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