Meritz Fire & Marine Insurance Shakes Up the Property Insurance Industry... Rises to 2nd Place in Net Profit Rankings

[Asia Economy Reporter Changhwan Lee] Meritz Fire & Marine Insurance is shaking up the non-life insurance industry by setting record-high net profits for seven consecutive quarters.

According to the non-life insurance industry on the 14th, Meritz Fire & Marine Insurance's net profit for the third quarter of this year was 260.7 billion KRW, a 55.1% increase compared to the previous year. The company has been continuously breaking its record performance for seven consecutive quarters since the first quarter of 2021.

In the third quarter, sales amounted to 2.6698 trillion KRW, and operating profit was 358.6 billion KRW, increasing by 6.1% and 48.2% respectively compared to the same period last year.

Meritz Fire & Marine Insurance ranked second in net profit for the third quarter, following Samsung Fire & Marine Insurance with 282.6 billion KRW. DB Insurance and Hyundai Marine & Fire Insurance recorded 254.4 billion KRW and 127.1 billion KRW, ranking third and fourth respectively.

In the non-life insurance industry, Samsung Fire & Marine Insurance has long held the undisputed first place, followed by Hyundai Marine & Fire Insurance and DB Insurance, but Meritz Fire & Marine Insurance is rapidly climbing to the second position in terms of net profit.

Meritz Fire & Marine Insurance Quarterly Net Profit Trend

Meritz Fire & Marine Insurance's sales (gross written premiums) have steadily increased since 2017, reaching 10.03 trillion KRW at the end of last year, growing more than 50% compared to the end of 2017.

The combined ratio has also improved significantly, from 112.0% at the end of 2019, 104.6% at the end of 2020, to 100.1% at the end of 2021. The cumulative combined ratio for the third quarter of 2022 was 97.3%, a 3.1 percentage point decrease compared to the previous year, which is the highest level in the industry.

Despite unexpected natural disasters such as typhoons and heavy rains in the third quarter, the company emphasized that damage was minimized due to a portfolio focused on long-term insurance.

Meritz Fire & Marine Insurance's profitability and growth are expected to increase significantly next year with the introduction of the new International Financial Reporting Standard for insurance contracts (IFRS 17). IFRS 17 requires insurance liabilities to be measured at fair value, recognizing margins as current income, which means the future value of long-term insurance contracts is immediately reflected in profit and loss. This system is said to be more advantageous for companies like Meritz Fire & Marine Insurance that hold high-quality long-term insurance contracts.

Regarding the recently growing concerns over real estate project financing (PF) loans, Meritz Fire & Marine Insurance only handles 100% senior loans, and there has not been a single loss on PF loans in the past nine years.

A company official stated, "Meritz Fire & Marine Insurance has achieved this qualitative growth by focusing on profitability-centered sales growth through securing high-quality new contracts and cost efficiency. With amoeba management prioritizing long-term profitability, we have concentrated all capabilities on cost efficiency and expanding highly profitable sales, so significant performance growth is expected from next year."

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