Kyobo Life Insurance posted a net profit of more than 700 billion won in the first half of this year. The contractual service margin (CSM), which represents future profit, also rose by more than 50%.
Kyobo Life Insurance said on Aug. 14 that first-half net profit on a consolidation basis was 704.8 billion won, up 21% from a year earlier. However, net profit on a separate basis was 478.6 billion won, down 18.2% from the same period a year earlier.
Both insurance and investment results declined. First-half insurance profit was 227.5 billion won, down 10.3% from a year earlier. The impact came from applying the second-quarter actuarial assumption guidelines. Financial authorities strengthened the standards for calculating actuarial assumptions this year so insurers would not estimate loss ratios and operating expenses too optimistically.
Investment profit was 403.8 billion won, down 18.7% from a year earlier. While reinvesting maturing assets into high-interest assets kept recurring investment income at a stable level, investment results fell as valuation and disposal losses on financial assets occurred due to a rise in interest rates in the second quarter.
By contrast, CSM, a base for future revenue, increased sharply. First-half new-contract CSM on a separate basis was 806 billion won, up 51.5% from 532 billion won a year earlier. Expanded sales of protection-type policies, including health insurance, drove growth.
As of the end of June, in-force CSM was 6.925 trillion won, up 11.0% from a year earlier. It also rose 6.4% compared with the end of last year.