Major insurance companies, including Samsung Life Insurance, Meriz Financial Group, Samsung Fire & Marine Insurance, DB Insurance, and Hyundai Marine & Fire Insurance, are expected to record an 'earnings shock' that falls short of market expectations for the fourth quarter of 2024.
According to Daishin Securities on the 17th, the combined net profit of these five insurance companies for the fourth quarter of last year is projected to be 1.2 trillion won, a decrease of 22.2% compared to the same period last year. This figure is 31.9% below market expectations. In the case of Meriz Fire & Marine Insurance, it has been assessed under Meriz Financial Group.
Park Hye-jin from the Research Institute noted that the insurers are likely to record their worst quarterly performance since the introduction of the new accounting standards. The analysis suggests that losses from deviations in reserves will expand due to an increase in claims for respiratory diseases (influenza). The combined loss from reserves for these five companies is expected to be minus (-) 487 billion won, marking the largest loss since the accounting standards changed. In particular, Hyundai Marine & Fire Insurance, which has a high proportion of children's insurance, is estimated to have the largest loss at -163 billion won, while Meriz Fire & Marine Insurance is projected to have the least.
The researcher said, "The loss ratio for auto insurance is expected to turn significantly negative due to heavy snowfall, recording the highest level in recent times," adding that "the losses associated with the adjustment of actuarial assumptions at the end of the year will also impact the fourth-quarter results from last year."
Nonetheless, the researcher mentioned, "Samsung Life Insurance, which is not a property and casualty insurer, is expected to be the only one that can manage to defend its profits," adding that "the impact of the wildfires in Los Angeles, USA, is assessed to have no effect on the remaining insurers except for DB Insurance."