“Domestic insurance companies received a poor performance report for the first half of this year, with net income declining by 15% compared to the first half of last year.
According to the Financial Supervisory Service on the 27th, the combined net income of 22 life insurance companies and 31 non-life insurance companies amounted to 7.975 trillion won in the first half of this year, a 15% (1.4121 trillion won) decrease compared to the same period last year.
By sector, the net income of life insurers was 3.334 trillion won, down 8.5% (311.6 billion won) from the same period last year. The insurance profit fell by 12.8% to 2.6134 trillion won as the burden of loss costs increased, while investment income remained at the previous year’s level at 1.7667 trillion won.
During the same period, the net income of non-life insurers dropped by 19.2% to 4.641 trillion won from the previous year. The sharp rise in the loss ratio due to factors such as large wildfires significantly affected the insurance profit, which decreased by 34% (1.9796 trillion won) to 3.7951 trillion won. On the other hand, investment income increased by 36% (418.2 billion won) to 2.5045 trillion won, driven by bond valuation gains due to falling interest rates.
In the first half of the year, the insurance industry’s premium income was 124.3823 trillion won, an increase of 8.0% (9.2547 trillion won) from the first half of last year. Life insurers’ premium income increased by 10.4% (5.6842 trillion won) to 60.1579 trillion won, and non-life insurers saw income grow by 5.9% (3.5705 trillion won) to 64.2244 trillion won.
For life insurers, premium income increased in protection-type (13.0%), variable (2.3%), and retirement pension (42.4%) products, but decreased in savings-type (-4.6%) insurance. Among non-life insurers, long-term (6.8%), general (4.1%), and retirement pension (15.0%) premium incomes rose, while auto (-2.8%) insurance premium income declined.
The total asset return (ROA) and return on equity (ROE) for insurers in the first half were 1.24% and 11.26%, respectively, down 0.29 percentage points and 0.44 percentage points from the same period last year.
Total assets and liabilities increased by 2.6% and 3.0% to 1,301.8 trillion won and 1,160.7 trillion won, respectively, from the end of last year. With liabilities growing more than assets, equity capital decreased by 0.8% to 141 trillion won from the end of the previous year.
The Financial Supervisory Service stated, “Insurance companies should manage their financial stability to prepare for uncertainties in the financial market, such as stock prices, interest rates, and exchange rates.”