The Profit and Loss of Insurance Companies in the First Half of the Year... Life Insurance Cries, Non-Life Insurance Smiles

Source: Financial Supervisory Service

[Asia Economy Reporter Changhwan Lee] The performance of insurance companies in the first half of this year showed a mixed outcome. While life insurance companies saw a decrease in net profit, non-life insurance companies significantly improved their performance due to better loss ratios.

According to the '2022 First Half Insurance Company Management Performance (Preliminary)' report released by the Financial Supervisory Service on the 31st, the total net profit of domestic insurance companies (23 life insurers and 29 non-life insurers) in the first half of this year was 5.6144 trillion KRW, down 62.6 billion KRW (1.1%) compared to the same period last year.

Overall, net profit showed little change from last year, but there were significant differences by sector. Life insurance companies recorded a net profit of 2.1807 trillion KRW in the first half, a decrease of 966.1 billion KRW (30.7%) compared to the same period last year.

This was due to a deterioration in insurance underwriting profit caused by a decline in premium income, as well as a decrease in investment operating profit due to reduced gains from financial asset disposals and dividend income. There was also a base effect from Samsung Life Insurance's special dividend from Samsung Electronics (801.9 billion KRW) in the first half of last year.

On the other hand, non-life insurance companies posted a net profit of 3.4337 trillion KRW during the same period, an increase of 903.5 billion KRW (35.7%) compared to the previous year. This improvement was driven by better underwriting profits due to lower loss ratios in long-term and automobile insurance, and increased investment operating profit thanks to foreign exchange gains from currency appreciation.

There was also a difference in premium income growth rates. Life insurers’ total premium income in the first half was 50.6133 trillion KRW, down 5.0753 trillion KRW (9.1%) from the same period last year. While protection-type insurance (+2.2%) saw a slight increase, savings-type insurance (-17.5%), variable insurance (-26.5%), and retirement pensions (-0.9%) declined.

Non-life insurers recorded a total premium income of 52.8038 trillion KRW, up 3.2924 trillion KRW (6.6%) compared to the previous year. Premiums for all categories, including long-term insurance (+5.1%), automobile insurance (+3.0%), general insurance (+8.4%), and retirement pensions (+23.9%), increased steadily.

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