The first-half overseas insurance subsidiaries' results for this year diverged between Samsung Life Insurance and Hanwha Life, which rank No. 1 and No. 2 in asset size among domestic life insurers. Hanwha Life's net profit increased from a year earlier, while Samsung Life Insurance's decreased. Although not large in scale, overseas operations, which are drawing attention as a new revenue source, show Hanwha Life delivering results while Samsung Life Insurance has slowed.
According to each company's semiannual report on the 10th, Samsung Life Insurance's Thailand subsidiary posted a net profit of 11.7 billion won in the first half, down 18.8% from the same period a year earlier. Samsung Life Insurance said performance was dampened as economic conditions worsened due to a slump in tourism, Thailand's key industry.
In the first half of this year, the combined net profit of Hanwha Life's Vietnam and Indonesia subsidiaries and Indonesia-based nonlife insurer Lippo General Insurance was 35.2 billion won, up 21.4% from a year earlier. The Indonesia subsidiary swung to a profit of 100 million won from a loss of 3.9 billion won in the first half of last year, and Lippo General Insurance's net profit rose to 9.1 billion won, up 300% from a year earlier. In contrast, the Vietnam subsidiary's net profit was 25.9 billion won, down 15% from a year earlier. Hanwha Life said it expanded operating profit by targeting the high-asset client market at the Indonesia subsidiary.
Samsung Life Insurance and Hanwha Life are among the major domestic life insurers that moved early to expand overseas. Samsung Life Insurance established a subsidiary in Thailand in 1997, recorded its first profit in 2017, and has since gradually expanded its revenue scale. Hanwha Life set up subsidiaries in Vietnam in 2008 and Indonesia in 2013. In 2023, it expanded its overseas business by acquiring Indonesia-based nonlife insurer Lippo General Insurance.
With net profit growth slowing, Samsung Life Insurance and Hanwha Life are in a position where they must seek new breakthroughs overseas. Hanwha Life's first-half net profit this year was 461.5 billion won, down more than 30% from a year earlier, while Samsung Life Insurance posted 1.3941 trillion won in the same period, but its net profit growth rate was only 1.9%.
The Korea Insurance Research Institute forecast that this year's growth rate of life insurance direct premiums in Korea will be around 0.3%, a slowdown from last year. The institute expected that for savings-type insurance, new sales of single-premium annuity insurance will decline due to falling interest rates. It projected that variable insurance could expand new sales on the back of a stock market rebound, but that it will be difficult to reverse the overall downward trend.
A life insurance industry official said, "With domestic low birthrates and aging weighing on insurers' profitability, overseas subsidiaries are drawing attention as a breakthrough for a rebound in results," adding, "In particular, Southeast Asia, where life insurers are focusing their efforts, has a higher share of young people than in Korea and insurance demand is on the rise."