Insurance Industry Continues 'Earning Surprise'... "Shined Even Brighter in Crisis"

[Asia Economy Reporter Oh Hyung-gil] Insurance companies recorded strong performance in the first quarter of this year due to the impact of COVID-19. Hospital visits decreased, leading to a reduction in life insurance premium claims, and reduced vehicle movement improved the loss ratio of automobile insurance.

According to the Financial Supervisory Service on the 15th, Samsung Life Insurance's net profit in the first quarter of this year was 1.0881 trillion KRW, a 373.2% increase compared to the same period last year. Samsung Life explained, "Other income increased due to the special dividend from Samsung Electronics and the reversal of variable guarantee reserves following the stock market boom."

Samsung Electronics distributed a total of 13.1243 trillion KRW as dividends for the 2020 fiscal year. Samsung Life holds 8.51% of Samsung Electronics common stock (excluding special accounts and preferred shares), receiving dividends amounting to 801.9 billion KRW. After deducting 155 billion KRW in corporate tax, 647 billion KRW was recognized as net profit. Variable guarantee profit and loss reflected 36 billion KRW. Samsung Life added that net profit excluding the special dividend also reached 440.6 billion KRW, a 91.6% increase from the previous year.

Samsung Fire & Marine Insurance also saw its net profit surge 163% to 431.5 billion KRW in the first quarter. Operating profit rose 136% to 595.3 billion KRW. Excluding the 140.1 billion KRW special dividend from Samsung Electronics, net profit more than doubled compared to the previous year, marking the highest quarterly performance.

Hanwha Life Insurance's net profit in the first quarter was 194.2 billion KRW, a 306.1% increase year-on-year. Other income reached 74 billion KRW due to rising interest rates and stock indices, turning a 83 billion KRW loss in the first quarter of last year into a profit.

Other income refers to the gain arising when the actual return on asset management exceeds the guaranteed interest rate promised to policyholders.

Dongyang Life Insurance also benefited significantly from other income. Dongyang Life recorded a net profit of 106.5 billion KRW in the first quarter, a 67.4% increase year-on-year. Notably, other income rose 73% to 80.6 billion KRW.

Record-Breaking Performance Continues Amid COVID-19 Impact

Hyundai Marine & Fire Insurance's net profit in the first quarter was 126.5 billion KRW, a 41% increase compared to the same period last year, marking the highest quarterly performance ever. Particularly, the automobile insurance loss ratio recorded 80.6%, down 4.7% from the first quarter of last year.

DB Insurance's net profit in the first quarter was 190.2 billion KRW, a 38.2% increase year-on-year. The automobile insurance loss ratio improved by 4.3 percentage points from 84.6% in the first quarter of last year to 80.3% this year.

However, some insurers struggled. Mirae Asset Life Insurance's net profit and operating profit in the first quarter were only 100 million KRW and 2.5 billion KRW, respectively. Revenue also decreased by 6.9% to 952.8 billion KRW.

One-time costs of 19 billion KRW occurred due to the separation of manufacturing and sales. In March, Mirae Asset Life transferred about 3,500 business-type branch managers and exclusive insurance planners to its subsidiary-type corporate agency, Mirae Asset Financial Services.

KB Insurance's net profit in the first quarter also fell 10.9% year-on-year to 68.8 billion KRW. Investment income decreased by 17.1% due to reduced gains from bond disposals.

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