Samsung Life Insurance, 1Q Net Profit 1.0881 Trillion Won... "Shift to Asset Management for Profit Pursuit" (Comprehensive)

[Asia Economy Reporter Oh Hyung-gil] Samsung Life Insurance achieved a net profit of 1 trillion KRW in the first quarter. Gains from stocks and interest rates surged as financial market conditions improved. Additionally, Samsung Electronics' special dividend also played a role.

On the 14th, Samsung Life Insurance announced that its consolidated net profit for the first quarter was 1.0881 trillion KRW, a 373.2% increase compared to the same period last year. Although sales decreased by 3.5% from the previous year to 10.0074 trillion KRW, operating profit rose 256.2% year-on-year to 1.3344 trillion KRW.

Samsung Life Insurance's investment operating profit significantly increased due to Samsung Electronics' special dividend, excluding corporate tax. Samsung Electronics paid a total dividend of 13.1243 trillion KRW as a settlement dividend for 2020. Samsung Life Insurance holds an 8.51% stake in Samsung Electronics common stock (special account, excluding preferred shares) and reflected a profit of 647 billion KRW from the special dividend after deducting 155 billion KRW in corporate tax.

Excluding the special dividend, net profit was 440.6 billion KRW, a 91.6% increase compared to the same period last year. The variable guarantee profit and loss improved due to the favorable stock market, and consolidated profits increased due to expanded affiliate performance and increased value of consolidated target securities.

The new contract value, an indicator representing future profit flow, was 384 billion KRW in the first quarter, up 19.6% year-on-year. This is the highest since the fourth quarter of 2016.

The new contract annualized premium equivalent (APE) recorded 677.1 billion KRW, down 2.2% from last year. Protection insurance was 438 billion KRW, down 15.6% year-on-year, but pension insurance sales, mainly through bancassurance, increased by 63.3% to 170 billion KRW.

In the first quarter, Samsung Life Insurance actively engaged in marketing activities such as strengthening data-based pre-attrition management and developing exclusive products for customers with expiring insurance, increasing the number of customers to 8.15 million, up 110,000 from the same period last year. As of the end of March, total assets stood at 334.6 trillion KRW, and the risk-based capital (RBC) ratio was 332%.

The loss ratio was 86.1%, up 1.4 percentage points from 84.7% in the same period last year. By coverage, the loss ratio was 141.5% for indemnity medical insurance, 102.1% for survival insurance, and 40.3% for death insurance.

Samsung Life Insurance announced plans to shift its management policy to strengthen profit pursuit going forward. As of March, the scale of alternative investment assets was 24.2 trillion KRW, accounting for 9.9% of managed assets. The company plans to raise this to over 15% by the end of 2025.

Additionally, it will establish management processes to respond to the new International Financial Reporting Standards (IFRS17) and the new solvency regime (K-ICS) to be implemented in 2023. The IFRS17 system, which has been in trial operation since April last year, will be upgraded by May next year to reflect revised standards.

A Samsung Life Insurance official explained, "Despite the difficult business environment due to the prolonged COVID-19 pandemic, we achieved these results by expanding market dominance centered on health products," adding, "We maintain industry-leading financial soundness."

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