Insurance Companies' Overseas Branches' Net Profit Plummets 35%... Impact of COVID-19 and Natural Disasters Combined

10 Insurance Companies Operating 35 Stores in 11 Countries

Overseas Branch Profit and Loss Status of Insurance Companies (Source: Financial Supervisory Service)

[Asia Economy Reporter Oh Hyung-gil] The net income earned by domestic insurance companies overseas has decreased by 35%. Not only was business activity restricted due to COVID-19, but loss ratios also increased due to natural disasters.

According to the overseas branch business performance of insurance companies released by the Financial Supervisory Service on the 26th, as of the end of last year, 10 domestic insurance companies operate 35 overseas branches in 11 countries.

Hanwha Life newly entered Vietnam, and Korean Re newly entered Shanghai, China. Additionally, Hyundai Marine & Fire Insurance's China corporation converted to equity investment under a joint venture contract, resulting in an overall increase of one branch compared to the end of the previous year.

The net income of overseas branches recorded 45.6 million USD, approximately 53.8 billion KRW, marking a 34.8% decrease compared to the previous year.

Insurance business profits fell 14.5% year-on-year to 61.5 million USD, while financial investment and other sectors recorded a loss of 15.9 million USD, expanding the deficit compared to the previous year.

Total assets amounted to 5.41 billion USD (5.9 trillion KRW), a 2.2% increase compared to the end of the previous year.

The financial authorities analyzed that although insurance companies' overseas branches realized profits mainly in the Asian market, risk factors due to the prolonged COVID-19 pandemic still exist.

Life insurers experienced reduced performance due to weakened local business foundations, face-to-face sales contraction caused by COVID-19, and increased insurance liabilities due to falling interest rates. Non-life insurers saw rising loss ratios due to natural disasters and riots in the U.S. region, raising concerns about deteriorating profits and losses from decreased premium income if the COVID-19 situation prolongs.

A financial authority official stated, "We will closely identify factors worsening profitability such as the impact of COVID-19 and high-cost accidents caused by natural disasters, closely monitor the localization process and business trends of newly entered overseas branches, and continuously monitor risk factors."

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