Who Will Be 4th in Non-Life Insurance? KB Insurance and Meritz Fire & Marine Insurance Neck and Neck (Summary)

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

KB Insurance Headquarters Building

[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, aiming to reverse the rankings, KB Insurance, which leads in premium volume, faces the challenge of recovering its declining performance. A major shakeup is anticipated in the rankings of insurance companies that have remained stable for 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 market 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, net profit was only 163.9 billion KRW, and investment operating profit shrank from 959.2 billion KRW to 844.3 billion KRW. However, insurance operating losses improved from 740.1 billion KRW in 2019 to 650.1 billion KRW last year.

Meritz Fire & Marine Insurance Building

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 through last year.

In terms of gross written premiums received from customers, KB Insurance is leading. Last year, KB Insurance achieved 10.9751 trillion KRW in gross written premiums, up 6.8% from the previous year. 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 to potentially overtake KB Insurance in gross written premiums this year.

As the two companies’ management performances diverge, attention is also focused on the actions of their CEOs. Kim Yong-beom, Vice Chairman of Meritz Fire & Marine Insurance, whose term expires next month, is expected to have a smooth path to a ‘third term.’ Since his appointment as president of Meritz Fire & Marine Insurance in 2015, Kim has led bold changes at the company.

He led a strategic shift from automobile insurance to long-term insurance, successfully implemented differentiated strategies such as introducing a business-type branch system and increasing exclusive insurance planners, setting Meritz apart from other non-life insurers. Although the process of aggressive branch consolidation and workforce reduction raised concerns within the industry, he has proven his capabilities through management performance.

Kim Ki-hwan, CEO of KB Insurance, who took office earlier this year, has a busy road ahead. The company expects him to demonstrate proven management skills, having been a versatile performer 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 achieve success, KB Insurance can definitely become number one.”

KB Insurance has set its management plan direction for this year as ‘accelerating a future-oriented fundamental turnaround of the core business and securing new growth engines based on digital capabilities,’ selecting key tasks such as ▲ solid market share (MS) growth based on value management ▲ achieving industry No.1 digital capabilities ▲ differentiated future growth channel operation strategies ▲ leading environmental, social, and governance (ESG) management ▲ human resources (HR) and organizational innovation and successful entry into new businesses.

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