KB Insurance and Meritz Fire & Marine Insurance Neck and Neck... Non-Life Insurance '4th Place' Competition

Meritz Net Profit 431.8 Billion Last Year
KB Insurance Lagging with 163.9 Billion

KB Insurance

[Asia Economy Reporter Oh Hyung-gil] KB Insurance and Meritz Fire & Marine Insurance are fiercely competing for the '4th place' position in the non-life insurance industry.

While Meritz Fire & Marine Insurance widened the gap in net profit with KB Insurance last year and is aiming for a rank reversal, KB Insurance, which leads in premium volume, faces the challenge of recovering its declining performance. A major shake-up is anticipated in the rankings of insurance companies that have remained stable for several years.

According to the insurance industry on the 8th, Meritz Fire & Marine Insurance recorded a net profit of 431.8 billion KRW based on consolidated financial statements last year, a sharp increase of 43.3% from the previous year.

Despite COVID-19, sales continued to grow steadily, centered on long-term insurance products through sales channels, and the company succeeded in reducing costs by cutting business expenses.

Meritz Fire & Marine Insurance maintained its growth trend even during a period of sluggish industry conditions. The net profit of Meritz Fire & Marine Insurance, which was 355.1 billion KRW in 2017, dropped to 260 billion KRW in 2018 but rebounded immediately the following year by 4.3%, recording 271.2 billion KRW.

On the other hand, KB Insurance received a disappointing performance report. Last year's net profit was only 163.9 billion KRW, and investment business income shrank from 959.2 billion KRW to 844.3 billion KRW. However, insurance business losses improved from 740.1 billion KRW in 2019 to 650.1 billion KRW last year.

The problem is that the sluggish growth trend has continued for several years. Net profit, which was 330 billion KRW in 2017, fell to 262 billion KRW in 2018 and further dropped to 234.3 billion KRW in 2019, continuing a downward trend for three consecutive years until last year.

Meritz Fire & Marine Insurance

In terms of gross written premiums received from customers, KB Insurance is leading. Last year, KB Insurance's gross written premiums increased by 6.8% year-on-year to 10.9751 trillion KRW. Meritz Fire & Marine Insurance recorded a smaller amount of 9.1667 trillion KRW, which increased by 13.9% from the previous year, laying the groundwork for potentially overtaking KB Insurance in gross written premiums this year.

As the management performances of the two companies diverge, attention is also focused on the actions of their chief executive officers (CEOs). Kim Yong-beom, Vice Chairman of Meritz Fire & Marine Insurance, whose term expires next month, is expected to secure a 'third term.' Since his appointment as president of Meritz Fire & Marine Insurance in 2015, Kim has led bold transformations at the company.

He steered a strategic shift from automobile insurance to long-term insurance, successfully implemented a business-type branch system, and increased exclusive insurance planners, differentiating the company from other non-life insurers. Although his aggressive branch consolidations and workforce reductions raised concerns within the industry, he has proven his capabilities through management achievements.

Kim Ki-hwan, CEO of KB Insurance who took office earlier this year, has a busy road ahead. The company expects him to demonstrate his proven management skills, having been a versatile figure at KB Financial Group.

At the mid-year management strategy meeting held last month, he encouraged employees by saying, "If we quietly fulfill our roles with passion and intensity until we reach success, KB Insurance can definitely become number one."

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