South Korean life insurance companies have reported solid earnings for the second quarter with Hanwha Life Insurance Co. posting higher-than-expected results and Mirae Asset Life Insurance Co. also faring well.
On Wednesday, Hanwha Life reported that its operating profit for the second quarter ended June this year reached 403.8 billion won ($353.6 million) on a consolidated basis, more than doubling from the same period last year. Its sales climbed 55.8 percent on year to 6.19 trillion won, while net profit fell 48 percent to 288.8 billion won. But when excluding a one-time gain of 400 billion won from a stock acquisition deal with sister company Hanwha General Insurance in the second quarter last year, the company’s bottom line has improved on year.
An unnamed Hanwha Life official said the steady increase in insurance sales coupled with the rise in asset management’s yield ratio helped boost the company’s earnings amid an absence of any major negative factors. The company’s six-month loss ratio for insurance fell by 2.3 percentage points from a year ago.
Market analysts said Hanwha Life benefited mostly from the recent Korean stock market rally. The company has successfully sold off low-returning bonds and bought stocks before the market took off early this year. Korean stocks have risen about 20 percent from the start of this year.
Mirae Asset Life Insurance also reported on Wednesday that it has swung to an operating profit of 33.3 billion won in the second quarter from losses in the previous quarter. Its sales rose 14.7 percent on year to 1.11 trillion won, but operating profit declined 28.9 percent from a year ago.
The company expected premium sales to increase in the future as the insurer’s annualized premium equivalent (APE) of coverage insurance and variable life insurance products favorably gained 26 percent and 44 percent, respectively, in the first six months of this year, which means a drastic rise in new subscribers.
It also expected synergy effect from combination with PCA Life acquired last year. In June, Mirae Asset Life also took over a life insurer in Vietnam, making inroads into overseas markets.
Hanwha Life Insurance stocks rose 3.3 percent, or 250 won, to 7,850 won in Seoul trading as of 3:25 p.m. Thursday, and Mirae Asset Life Insurance shares increased 3.7 percent, or 200 won, to 5,620 won.
By Park Joon-hyung and Hong Jang-won
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