Concern amid Good Results
The nation’s big three non-life insurance companies, including Samsung, Dongbu and Hyundai, posted more than 1.4 trillion won (US$1.25 billion) in net profit in the first half of this year, up over 50 percent from the same period a year ago. Industry sources said system improvements such as repair and rental costs of foreign cars decreased their loss ratio of car insurances, leading to good business showings.
Samsung Fire & Marine Insurance Co., the biggest non-life insurance company in South Korea, announced on July 31 that its net profits in the first half of the year recorded at 779.8 billion won (US$695.94 million), up 51.2 percent from a year earlier. The loss ratio of Samsung Fire’s car insurances stood at 76.3 percent, down 3.6 percent from the same period last year. The loss ratios of its long-term insurances and general insurances also dropped by 1.6 percent points and 3.2 percent points.
Dongbu Insurance Co. also showed a remarkable growth in its performance. The company’s tentative net profits reached 369.8 billion won (US$330.03 million) over the same period, up 55.7 percent from a year ago. Dongbu Insurance also saw the loss ratio of its car insurances decline by 4.6 percent points from 82.2 percent in the first half of last year to 77.6 percent and the loss ratio of its long-term insurances and general insurances decrease by 22 percent points and 8.4 percent points, respectively. Hyundai Marine & Fire Insurance Co.’s net profits also rose by 41.8 percent on-year to 282.2 billion won (US$251.85 million).
Accordingly, the combined net profits of the three companies in the first half amounted to 1.43 trillion won (US$1.28 billion), up 50 percent from the same period last year. In addition, Meritz Fire & Marine Insurance Co. and Hanwha General Insurance Co., which announced their Q2 results on the same day, also saw their net profits in the first half grow by 45.7 percent points and 55.6 percent points to 203.5 billion won (US$181.62 million) and 93.8 billion won (US$83.71 million), respectively.
However, non-life insurance companies are worried about the government’s additional pressure on premiums despite large profits in the first half of the year.