The net profits of insurance companies, which have stepped back for the second year in a row, have increased after three years.
This is a result of the loss of non-life insurers decreased due to the distance from the novel coronavirus infection (Corona 19) last year, and the amount of transfer of guarantee reserves that life insurers must accumulate in accordance with the booming stock market.
According to the Financial Supervisory Service on the 24th, the total net income of life and non-life insurers last year was 6,806 trillion won, a 13.9% increase from the previous year.
Specifically, the net profits of life insurers (3.4 trillion won) and non-life insurers (2.6262 trillion won) increased 10.9% and 18.1%, respectively.
Life insurers’ investment operating income decreased by KRW 1,181.8 billion amid a low interest rate environment, but the extent of the insurance operating deficit decreased more (2,176 trillion KRW) as the amount of guarantee reserves decreased due to a rise in stock prices.
The loss ratio of auto insurance and long-term insurance fell by 7.2 percentage points and 0.6 percentage points, respectively, as outdoor activities and hospital care decreased due to Corona 19, reducing the insurance business deficit by KRW 1.6 trillion.
Recently, the net profit of insurance companies fell to 7.3 trillion won in 2018 after recording 7.9 trillion won in 2017, and in 2019, it has shrunk to 5.3 trillion won, the lowest level since 2009.
The Financial Supervisory Service assessed, “Last year’s net income improved due to a decrease in the amount of guarantee reserves transferred, a temporary loss ratio decline, and the base effect of poor performance in the previous year, but it is below the average for the last three years (6.8 trillion won).”
The total return on assets (ROA) and return on equity (ROE), which are indicators of profitability for insurance companies, were 0.48% and 4.45%, up 0.03 percentage points and 0.04 percentage points year-on-year, respectively.
Last year, the total amount of insurance premiums (income insurance premiums) received from contractors by insurance companies was 221.4 trillion won, up 4.3% from the previous year.
Life insurers’ income from variable insurance and retirement insurance decreased, but income from savings insurance and insurance premiums increased more.
Non-life insurers have increased their premium income from all products, including long-term insurance, auto insurance, and general insurance.
As of the end of last year, the total assets of insurance companies were 132.1 trillion won, an increase of 6.6% (82 trillion won) from a year ago.
The Financial Supervisory Service said, “As the expansion of investment in high-risk assets such as alternative investments may lead to an increase in insolvent assets, we will strengthen inspections on investment screening and soundness management, and closely monitor the adequacy of execution of project expenses.”
/yunhap news
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