Performance of Local Insurers
The Financial Supervisory Service (FSS) of South Korea announced on May 23 that South Korean insurance companies’ current net income totaled 2.7765 trillion won (US$2.4 billion) in the first quarter of this year, up 24.4% from a year ago. The FSS pointed out that their improved performance is mainly because of one-off profits and they are still required to make better the qualitative aspect of their income by means of risk management and efforts for sustainable profits.
The net income of non-life insurance companies reached 1.2025 trillion won (US$1.1 billion) with a year-on-year growth of 32.8%. This can be attributed to a decline in their loss ratio from 82.2% to 78.0% since the recent car insurance reform, which added 149 billion won (US$134 million) to their net income. It includes their gains from the disposal of real estate that reached 257.5 billion won (US$231 million), too.
That of life insurance companies increased 18.6% to 1.5740 trillion won (US$1.4 billion), which includes a dividend income of 227.9 billion won (US$205 million) that rose in the bullish domestic stock market and 274.7 billion won (US$247 million) in investment profit such as gains from the disposal of securities.
In the meantime, their premium incomes showed contrasting results. That of life insurance companies fell 1.6% from a year earlier to 28.5246 trillion won (US$25.6 billion) whereas that of non-life insurers rose 4.0% to 19.1836 trillion won, led by a 7.5% increase in the car insurance segment.