Thanks to improved long-term insurance results and growth in general insurance, Hyundai Marine & Fire Insurance(001450)'s net profit for the second quarter of this year improved sharply.
Hyundai Marine & Fire Insurance said on the 14th that net profit for the second quarter of this year was 391.8 billion won, up 58.2% from a year earlier. Cumulative net profit for the first half rose 36.4% to 615.1 billion won. Operating profit for the same period increased 29.5% to 814.3 billion won.
Long-term insurance led the earnings improvement. Second-quarter long-term insurance profit was 348.0 billion won, up 89% from a year earlier. The deficit from the difference between expected and actual claims narrowed, and a one-off reversal effect was added by reflecting the actuarial assumption advancement guidelines.
Auto insurance posted a profit of 3.8 billion won in the second quarter, up 312.1% from a year earlier. However, on a first-half cumulative basis, it recorded a loss of 10.2 billion won. Although premiums were raised in February, the cumulative effect of earlier premium cuts, rising claims costs, and delays in system improvements related to long-term treatment for patients with minor injuries acted as burdens.
General insurance profit was 52.0 billion won in the second quarter, up 88.0%. On a first-half cumulative basis, it increased 38.9% to 102.2 billion won. The base effect of large-loss incidents last year and stabilization of the loss ratio affected the improvement in results.
Investment results were weak, by contrast. Second-quarter investment profit was 99.7 billion won, down 23.0% from a year earlier, and on a first-half cumulative basis it fell 55.3% to 105.8 billion won.
The contractual service margin (CSM), which represents future insurance profit, was 9.8944 trillion won at the end of June, up 11.2% from the end of last year. Increases in new-business CSM and the application of actuarial assumption advancement guidelines had an impact.
Capital soundness also improved. As of the end of June, the K-ICS risk-based capital ratio was 209%, up 18.9 percentage points from the end of last year. Higher interest rates were analyzed as having an impact.