Last year, insurance companies recorded a net profit exceeding 13 trillion won (US$9.68 billion), marking a record high performance in history.
According to the “2023 Insurance Company Management Performance” report released by the Financial Supervisory Service on March 26, the combined net profit of 22 life insurance companies and 31 non-life insurance companies amounted to a total of 13.36 trillion won. This represents a significant increase of 4.18 trillion won, or 45.5 percent, compared to 2022.
By sector, life insurance companies saw an increase of 1.39 trillion won, or 37.6 percent, compared to the previous year, reaching 5.1 trillion won, while non-life insurance companies increased by 2.79 trillion won, or 50.9 percent, to 8.26 trillion won.
This is mainly attributed to the adoption of new accounting standards such as IFRS9 and IFRS17 last year. The improvement in performance due to increased sales of guaranteed insurance and long-term insurance also contributed to the increase in net profits.
Last year, the total premium income amounted to 237.61 trillion won, showing a decrease of 15.18 trillion won, or 6.0 percent, compared to the previous year. While the premium income of non-life insurance companies increased by 5.09 trillion won, or 4.2 percent, to 125.2 trillion won, the premium income of life insurance companies decreased by 20.28 trillion won, or 15.3 percent, to 112.41 trillion won compared to the previous year.
Non-life insurance companies experienced a uniform increase in premium income across various sectors, including long-term, automobile, general insurance, and retirement pensions. Long-term premiums increased by 3.5 percent, automobile premiums by 1.4 percent, general insurance premiums by 8.5 percent, and retirement pensions by 6.6 percent. On the other hand, life insurance companies witnessed a decline in premium income due to policies focused on guaranteed insurance sales and stock market downturns, resulting in decreases in savings-type policies, variable insurance, and retirement pensions. Savings-type policies decreased by 38.0 percent, variable insurance by 4.0 percent, and retirement pensions by 14.7 percent.
Last year, the return on assets (ROA) was 1.09 percent, marking an increase of 0.40 percentage points compared to the previous year. However, the return on equity (ROE) stood at 8.02%. Despite an increase in net profit, it decreased by 0.20 percentage points due to the increase in net assets resulting from regulatory changes.