'Oldest Brother' Life Slows, Fire Rushes... Divergent Paths for Samsung Insurers in 2Q (Comprehensive)

2Q Net Profit: Life Insurance Down 26%, Fire Insurance Up 40%
Growth Limits in Life Insurance... Impact of IFRS17 Adoption
Fire Insurance Surges... CSM Surpasses Leading Samsung Life Insurance

The second-quarter earnings of Samsung Group-affiliated insurance companies showed mixed results. Since the introduction of the new accounting standard IFRS17, Samsung Fire & Marine Insurance has continued to post strong results, while Samsung Life Insurance, the overall leader in the insurance industry, showed somewhat sluggish performance.

Samsung Life Insurance announced on the 14th that it recorded a consolidated net profit of 299.8 billion KRW and an operating profit of 318.3 billion KRW for the second quarter of this year. Compared to the same period last year, net profit decreased by 26.2% and operating profit by 42.6%. Although it holds an overwhelming first place with total assets exceeding 300 trillion KRW as of the end of the first half, the results are somewhat disappointing.

On the other hand, Samsung Fire & Marine Insurance continued its smooth sailing. It posted an operating profit of 746.8 billion KRW and a net profit of 603.2 billion KRW in the second quarter of this year, up 27.9% and 40.3% respectively compared to the same period last year.

Regarding the Contractual Service Margin (CSM), a profitability indicator newly introduced after the adoption of the new accounting standard IFRS17, Samsung Fire & Marine Insurance surpassed Samsung Life Insurance. As of the end of the first half, Samsung Fire & Marine Insurance’s CSM was 12.6549 trillion KRW, an increase of 453.5 billion KRW from the end of last year. During the same period, Samsung Life Insurance’s CSM was estimated at around 11.9 trillion KRW, up 10.8%. CSM is a concept that evaluates the future profits expected from insurance contracts. It is recognized as a liability at the time of the insurance contract and amortized as profit while the contract is maintained.

The entire life insurance market has faced growth limitations, and the new accounting standard is considered more favorable to non-life insurance. Nevertheless, Samsung Life Insurance showed growth for the first half of the year overall. It recorded a consolidated net profit of 1.0389 trillion KRW and an operating profit of 1.2001 trillion KRW, increasing by 47.0% and 36.9% respectively compared to the same period last year. Its CSM remains at the highest level in the industry.

The new contract Annual Premium Equivalent (APE, a concept converting premiums to a one-year basis) for the second quarter was 922.3 billion KRW, up 36.8% from the second quarter of last year. In particular, the protection-type new contract APE rose 80.4% to 778.4 billion KRW. Samsung Life Insurance explained that this was due to "actively responding to the expansion of the whole life market and continuing sales of new health insurance contracts."

Meanwhile, Samsung Fire & Marine Insurance set an all-time high with a net profit of 1.2166 trillion KRW (pre-tax profit of 1.6286 trillion KRW) for the first half, up 27.3% from the same period last year. Both insurance profit (1.2581 trillion KRW) and investment gains (354.1 billion KRW) increased by 19.5% and 47.9% respectively compared to the first half of last year.

It performed well across long-term insurance, general insurance, and automobile insurance. Long-term insurance profit was 861.6 billion KRW, up 29.2% from the same period last year. General insurance profit was 142.1 billion KRW, increasing 10.8% year-on-year. Insurance revenue increased due to market expansion in specialty and marine insurance and growth in overseas business, and the loss ratio fell as high-cost claims decreased. Automobile insurance recorded a loss ratio (ratio of paid claims to received premiums) of 76.3% and an insurance profit of 201.9 billion KRW. Although insurance profit decreased by 6.6% compared to the same period last year, it is explained to be a favorable level compared to the pre-COVID-19 period.

Kim Jun-ha, Chief Financial Officer (CFO) and Head of Management Support Office at Samsung Fire & Marine Insurance, said, "Despite ongoing internal and external uncertainties, we achieved excellent business results in the first half. Going forward, we will continue to actively respond to changes in institutional and market environments, pursue solid growth, efficiency innovation, and risk management to ensure stable profit expansion."

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