Hyundai Marine & Fire Insurance reported an increase in net profit for the first quarter of 2026, driven by improvements in long-term insurance, despite losses in auto insurance and poor investment performance.
The company announced on May 15 that its standalone net profit for the first quarter reached 223.3 billion won, a 9.9% increase compared to the same period last year.
The growth was primarily led by long-term insurance, which saw profits rise to 265.9 billion won, a 132.5% increase year-on-year. This improvement was attributed to a slowdown in the growth of actual payouts compared to expected claims, enhancing the gap between expected and actual insurance payouts. Additionally, managing a portfolio focused on high-profit products contributed to maintaining profitability.
General insurance profits also increased by 9.4% to 50.2 billion won, thanks to the absence of unusual factors such as large claims and a stable overall loss ratio.
However, the auto insurance segment faced challenges, reporting a loss of 14 billion won, marking a shift from profit in the previous year. This downturn was influenced by the cumulative effects of premium reductions implemented until 2025 and rising compensation costs.
Investment performance also declined significantly, with investment income dropping by 94.3% to 6.1 billion won compared to the same period last year. This was due to valuation losses from bonds and alternative investments resulting from rising interest rates. Nevertheless, the company anticipates that if interest rates stabilize in the second quarter, some of these valuation losses may be recovered.
The insurance contract margin (CSM), a future profitability indicator, stood at 9.17 trillion won, reflecting a 0.7% increase year-on-year. Hyundai Marine & Fire Insurance is managing a portfolio of high CSM products to ensure strong profitability.
Furthermore, solvency indicators improved, with the solvency ratio (K-ICS) reaching 207.2% at the end of the first quarter, an increase of 17 percentage points from the end of the previous year. This improvement was achieved through duration matching management, which reduced market interest rate volatility, along with a decrease in required capital due to the improved gap between expected and actual payouts.
* This article has been translated by AI.
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