Hanwha Life's cumulative net profit for the third quarter of this year increased by over 10% compared to the same period last year, driven by improved insurance profits and growth in overseas subsidiaries. However, losses from investment profits were recorded due to fluctuations in exchange rates and the stock market.
On November 12, Hanwha Life announced that its cumulative consolidated net profit for the third quarter reached 865.6 billion won, a 12.6% increase from 768.9 billion won in the same period last year.
The cumulative insurance profit for the third quarter was 385.1 billion won, up 176% year-on-year. This figure exceeds last year's total annual insurance profit of 344.4 billion won by more than 10%. The company attributed this growth to its ongoing product portfolio restructuring and profitability-focused sales strategy initiated last year.
The insurance contract margin (CSM), which indicates future profitability, also expanded. The cumulative new contract CSM for the third quarter was 2.086 trillion won, a 40.0% increase from 1.4898 trillion won in the same period last year. The new contract CSM for the third quarter alone rose approximately 39.3% compared to 564.3 billion won during the same period last year.
As a result, the CSM held as of the end of September was 9.4144 trillion won, a 5.4% increase from 8.9284 trillion won at the end of the first half.
On the other hand, investment profits were negatively impacted by financial market volatility. The cumulative investment profit for the third quarter recorded a loss of 107.3 billion won. Losses were incurred due to foreign exchange valuation losses from previously issued overseas hybrid capital securities and losses reflected in the variable insurance hedging process amid increased stock market volatility.
Hanwha Life explained, "Since overseas hybrid capital securities are issued and redeemed in dollars, the foreign exchange gains and losses that occur before redemption are accounting fluctuations that are distinct from actual asset management performance."
The performance of overseas subsidiaries also contributed to the increase in net profit. The cumulative net profit from overseas subsidiaries totaled 146.6 billion won, a 74.5% increase compared to the same period last year.
As of the end of September, the expected solvency ratio (K-ICS) was 171.0%, up 3.0 percentage points from 168.0% at the end of the first half. This improvement was influenced by new contract inflows and a reduction in basic assumption risks due to improved claims experience.
A Hanwha Life official stated, "Although non-recurring factors related to fluctuations in exchange rates and stock prices were reflected, the competitiveness of our core business has been further strengthened based on the expansion of new contract CSM and increased insurance profits. We will enhance the fundamental strength of insurance profits through profitability-focused product portfolio management and claims experience management, while continuously improving corporate value by expanding synergies with domestic and overseas subsidiaries."
* This article has been translated by AI.
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