The insurance sector in South Korea has experienced a notable rise in combined net income, with a nearly 50% increase in the first nine months of this year compared to the same period last year.
The collective net profit of 22 life insurance firms and 31 non-life insurance companies in Korea amounted to KRW11.33 trillion (approximately US$8.74 billion) for the January to September period. This figure represents a 47.2% increase from the same period in the previous year.
Specifically, the net income of life insurance companies jumped by 49.4% to around KRW4.4 trillion during this period. Simultaneously, non-life insurers reported a 45.8% rise in combined net profit, reaching KRW7.02 trillion.
This substantial rise in net income has been primarily linked to a low base effect. This effect was due to significant increases in policy reserves during the same period last year, which had almost balanced out an investment income of KRW24.7 trillion.
Furthermore, during the first nine months of this year, the premium income of these insurance companies reached 162.3 trillion won. This is an increase of 3.8%, or KRW5.98 trillion, compared to the previous year.
In terms of financial performance metrics, the return on assets for these companies improved by 0.54 percentage points to 1.32%. However, the return on equity saw a decrease of 0.39 percentage points, settling at 9.06%.
As of the end of September, the total assets of these insurance companies stood at KRW1,153.4 trillion. This is a 12% decrease, or a reduction of KRW156.7 trillion, from the KRW1,310 trillion recorded at the end of 2022.
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