Insurance industry, provisional net profit of 6,806 trillion won last year… 13.9% year-on-year ↑

Last year, it was found that the net income of domestic insurance companies rose 13.9% (742.8 billion won) to 6,806 trillion won compared to the previous year.

On the 24th, the Financial Supervisory Service released the’preliminary value of 2020 insurance company business performance’ and announced it as such.

During the same period, the net income of life insurance companies was KRW 3,454.4 billion, an increase of 10.9% (340.4 billion KRW) from the previous year. Non-life insurers also recorded net income of 2.62 trillion won, up 18.1% (402.4 billion won) from the previous year.

The Financial Supervisory Service said, “In the case of life insurers, insurance operating profit and loss improved due to a decrease in guarantee reserves and an increase in savings-type insurance sales.” .

Income insurance premiums, which are equivalent to corporate sales, also increased by 4.3% (9,542 billion won) from the previous year to 221.904.4 billion won.

Income insurance premiums for life insurers increased by 2.0% (2,3248 billion won) from the previous year to 119,5872 billion won. Non-life insurers also rose 7.0% (6,729.4 billion won) to 102,3172 billion won.

Last year’s total assets, where financial ecology can be seen, was 132.1 trillion won, an increase of 82 trillion 200 billion won (6.6%) from the previous year.

Last year’s total return on assets (ROA) and return on equity (ROE) rose by 0.03%p and 0.04%p from the previous year to 0.48% and 4.45%, respectively.

Financial authorities are concerned about the improvement in profitability this year despite the growth of the insurance industry.

It is explained that the base effect of sluggish performance in 2019 was attributable to the average net profit for the past three years (6.8 trillion won).

In fact, according to the ‘2019 Insurance Company Management Performance’ released by the Financial Supervisory Service last year, the net income of insurance companies in 2019 was 5,336.7 billion won, a 26.8% decrease from the previous year, the lowest level in 10 years.

The Financial Supervisory Service said, “Insurance operating profit is likely to slow down due to in-person business restrictions and reduced consumption capacity, and there is a possibility that the loss ratio will rise again when Corona 19 is filed.” The risk of damage to alternative investment assets remains, and it is unclear whether profitability will improve.”