South Korea's life insurance companies suffered a combined operating loss of KRW17trn ($15.17bn) in the first nine months of this year. However, they managed to post a net profit during the period on the back of investment gains that more than offset the losses in the insurance business.
The 24 life insurers in the country, including eight foreign firms, saw their combined net profit increase by KRW229.5bn to KRW4.04trn for the January-September period, reported Business Korea citing data from the Financial Supervisory Service (FSS).
The combined net profit of the life insurance firms increased by 6% year-on-year in the first nine months of the year, supported by a one-time profit from Samsung Life Insurance's disposal of some of its stakes in Samsung Electronics.
Life insurers posted KRW16.85trn in operating losses from January to September this year. Their losses grew by KRW1.26trn compared to a year earlier, hit by a decline in sales of savings-type insurance products and an increase in claim settlements due to the growing cancellations and matured products.
However, their investment returns recorded KRW18.5trn. The operating profit from their investment business rose by KRW1.43trn, or 8.4%, including the KRW1.1trn gains of Samsung Life Insurance on sales of Samsung Electronics shares. In addition, their non-operating profit came to KRW3.77trn, up KRW314.3bn or 9.1%, from a year ago. This was largely thanks to KRW323.7bn worth of income from commissions on robust sales of variable life insurance products.
The combined premiums received by life insurance companies stood at KRW77.89trn, down by 4.7%, from the same period last year. This was because the gross premiums of savings-type insurance products dropped by KRW4.88trn, while that of coverage insurance products grew by KRW595.1bn.