Insurance Companies' Cumulative Net Profit for Q3 Reaches 7.6 Trillion KRW, Up 37% YoY

[Asia Economy Reporter Kim Jin-ho] The cumulative performance of domestic insurance companies for the third quarter of this year has shown significant improvement.

According to the '2021 January-September Insurance Company Management Performance' report released by the Financial Supervisory Service on the 25th, the cumulative net income of domestic insurance companies for the third quarter reached 7.6305 trillion KRW, a 37.3% increase compared to the same period last year.

The cumulative net income of life insurance companies for the third quarter was 3.6915 trillion KRW, an increase of 557.3 billion KRW (17.8%) compared to the same period last year. Insurance operating profit improved due to eased burden of guarantee reserve accumulation and reduced business expenses, but investment operating profit deteriorated due to decreased interest income and financial asset disposal gains.

The cumulative net income of non-life insurance companies for the third quarter was 3.939 trillion KRW, an increase of 1.5158 trillion KRW (62.6%) compared to the same period last year. This was influenced by the decline in loss ratios for automobile insurance and long-term insurance due to the impact of COVID-19, and the decrease in large-scale accidents leading to a reduction in general insurance loss ratios, significantly improving insurance operating profit.

The cumulative insurance premiums of insurance companies for the third quarter amounted to 155.6 trillion KRW, an increase of 3.2 trillion KRW compared to the same period last year.

The return on assets (ROA) of insurance companies was 0.77%, rising by 0.18 percentage points compared to the same period last year. The return on equity (ROE) also increased by 1.88 percentage points to 7.33% compared to the same period last year.

As of the end of September, the total assets of insurance companies stood at 1,338.3 trillion KRW, an increase of 16.9 trillion KRW compared to the end of last year. The main cause was the increase in operating assets due to premium income.

A Financial Supervisory Service official explained, "The improvement in insurance companies' net income is due to temporary factors such as the slowdown in insurance operations growth of life insurers and the improvement in loss ratios of non-life insurers, so it is difficult to consider that the revenue structure has improved. We plan to strengthen continuous monitoring of risks related to asset price declines, such as the impact of interest rate fluctuations and losses on alternative investment assets."

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