The combined net profit of life insurance firms in South Korea rose 6.7% on year in the first-half of this year, boosted by higher investment returns, according to the government’s latest data.
Twenty-four life insurers, including eight foreign firms, saw their combined net profit increase by 198.7bn won ($177.2m) to 3.14trn won for the January-June period, according to data by the Financial Supervisory Service (FSS).
Their investment income rose 11.7% year-on-year, or 1.35trn won, to 12.99trn won in the six months to June 30, thanks to “gains on disposition of market securities”, the FSS said in a statement.
Non-operating income grew 14.9% from a year ago, or 332.5bn won, to 2.56trn won, largely due to higher fees from increased sales of variable life insurance products such as retirement pensions and protection-type insurances.
“The growth for the year to June was based on gains on disposal of marketable securities,” the FSS added.
The combined net loss of the companies’ insurance operations rose by 13.1% year on year to KRW11.3trn in the first half, hit by a decline in sales of savings-type insurance products and rising claims.
Insurance firms in South Korea have been hesitant to sell savings-type insurance products to meet stricter capital requirement rules.
Overall, the data show that their profitability was on a steady rise with the insurers’ average return on assets gaining to 0.75% for the first half, from 0.74% for the same period last year.