Samsung Life Insurance (032830.KS) posted first-quarter net profit of 1.2 trillion won, boosted by higher investment returns amid a booming stock market. Samsung Fire & Marine Insurance (000810.KS) also saw improvements in both insurance and investment earnings.
Samsung Life said Wednesday that its first-quarter net profit reached 1.2036 trillion won, up 89.5% from a year earlier. Investment earnings surged 125.5% to 1.273 trillion won, driven by higher dividend income from the stock market rally along with contributions from subsidiaries and consolidation effects.
Insurance service earnings fell 7.7% year-on-year to 256.5 billion won, weighed down by wider losses from the gap between expected and actual loss ratios. New contract Contractual Service Margin (CSM) came in at 848.6 billion won in the first quarter, up 11% from the previous quarter. The company attributed the increase in new contract CSM to higher health insurance sales and growth in both exclusive and non-exclusive channels. Its Korean Insurance Capital Standard (K-ICS) ratio, a measure of capital adequacy, stood at 210% as of the end of March, up 12 percentage points from the end of last year.
Samsung Fire & Marine also announced on the same day that pretax operating profit rose 4.3% year-on-year to 857.7 billion won, with net profit up 4.4% to 634.7 billion won. Insurance earnings grew 5.0% to 551 billion won, while investment earnings rose 24.4% to 362 billion won. The company said interest and dividend income increased on the back of preemptive improvements to its bond portfolio and enhanced investment efficiency. Samsung Fire & Marine's K-ICS ratio stood at 270.1% as of the end of March, up 7.2 percentage points. "As a result of our preemptive efforts to strengthen fundamentals, insurance earnings returned to growth in the first quarter," a Samsung Fire & Marine official said. "We will build a new foundation for growth going forward."
