DB Insurance said on the 15th that net profit for the first quarter came to 268.5 billion won, down 39.9% from a year earlier. Revenue rose 16.2% to 5.7782 trillion won, but operating profit fell 28.5% to 462.7 billion won.
DB Insurance's lower earnings were largely due to insurance operating profit dropping 43.7% to 226.6 billion won. The main reason was a 47.5 billion won operating loss in general insurance after a fire at the Daejeon Safety Industry plant on Mar. in March. The company reportedly signed a 68.5 billion won fire insurance policy with DB Insurance, using the building and machinery as collateral.
Long-term insurance fell 32.7% to 265.2 billion won. This was due to a temporary rise in large claims such as death and permanent disability, and a continued increase in the loss ratio for indemnity health insurance. Auto insurance profit plunged 80.8% to 8.8 billion won. The loss ratio rose as the premium recognized as actual revenue per vehicle steadily decreased. The loss ratio is the amount of claims paid by an insurer divided by premiums.
The insurance contractual service margin (CSM) balance was 12.8 trillion won, a net increase of 616.9 billion won from the end of last year. Investment profit was 236.1 billion won, down 3.2% from a year earlier. The Korea Insurance Capital Standard (K-ICS) ratio was 232.1%, up 13.9 percentage points from the previous quarter.
A DB Insurance official said, "Insurance operating profit was weak due to a one-off major loss in the first quarter, but we will continue profitability improvement measures to expand earnings."