Samsung Life Insurance(032830)'s net profit for the second quarter this year fell by about 8% from a year earlier due to the impact of the financial authorities' application of actuarial assumption guidelines. However, cumulative net profit for the first half nearly jumped 34%, helped by improved investment gains.
Samsung Life Insurance said on the 13th that second-quarter net profit was 727.4 billion won, down 8.3% from a year earlier. The financial authorities tightened actuarial assumption standards for the estimated loss ratio and operating expenses starting this year, increasing the expense burden. Revenue rose 71.9% to 18.7599 trillion won, while operating profit fell 32% to 622.6 billion won.
Cumulative net profit for the first half was 1.9677 trillion won, up 33.8% from a year earlier. Profit attributable to owners of the parent increased 35.8% to 1.8935 trillion won. Revenue and operating profit were 33.4793 trillion won and 1.9804 trillion won, up 73.3% and 18.6%, respectively.
Insurance service profit and loss came to 533.1 billion won, down 35.9%. This was also largely due to the strengthened actuarial assumption standards. In contrast, investment gains were tallied at 1.858 trillion won, helped by dividend income and improved results at subsidiaries.
The contractual service margin (CSM), which represents future profit, was 1.7175 trillion won in the first half, up 20.4% from a year earlier. As sales of health insurance and whole life insurance increased, the protection-type new business CSM came to 1.6426 trillion won. The risk-based capital (K-ICS) ratio stood at 208% at the end of June.
Samsung Life Insurance explained that a one-off CSM adjustment occurred in the second quarter as it applied a conservative loss ratio to new collateral under the financial authorities' guidelines. Additional assumption changes are scheduled for the fourth quarter, but the company noted that most of the guidelines have already been reflected, so the additional impact is expected to be limited.