Hanwha Life reported a significant increase in net profit for the first half of the year, driven by improvements in both insurance and investment gains. The company's focus on profitability-oriented product sales has also led to a record high in new contract service margin (CSM) since the implementation of International Financial Reporting Standards (IFRS 17).
On August 12, Hanwha Life announced that its consolidated net profit for the first half of the year reached 904.5 billion won, a 96% increase compared to the same period last year. On a standalone basis, the company recorded a profit of 510.2 billion won, up 183.9% due to substantial improvements in both insurance and investment gains.
The performance of domestic subsidiaries, including Hanwha General Insurance and Hanwha Investment & Securities, as well as overseas operations, contributed to the increase in consolidated profits. The combined net profit of subsidiaries for the first half was approximately 500.9 billion won, with the share of profits from overseas subsidiaries expanding to 11%. Hanwha Life plans to enhance the profitability of its subsidiaries and expand synergies to stabilize its profit base in the future.
New contract profitability also improved, with Hanwha Life's new contract CSM reaching 1.3 trillion won, a 40.5% increase from the previous year. This is the largest figure for the first half since the introduction of IFRS 17. The sales of medium- and long-term whole life insurance have expanded, resulting in an overall new contract profitability of 11 times, an improvement from 7.2 times last year.
Looking ahead, Hanwha Life aims to continue expanding sales of medium- and long-term whole life insurance while strengthening its health insurance market strategy, focusing on newly launched dementia and long-term care products.
The profitability of existing contracts also improved, with the CSM for existing contracts at the end of the first half reaching 8.9285 trillion won, an increase of 214.8 billion won from the end of last year. Despite the application of loss ratio and expense assumption guidelines, the inflow of new contract CSM and the reduction of experience adjustments had a positive impact.
The contract retention rate, a measure of sales efficiency, stood at 90.0%. The number of agents affiliated with Hanwha Life's subsidiary GA increased, reaching 38,092, primarily driven by Hanwha Life Financial Services.
The solvency ratio (K-ICS) is expected to rise to 167%, a 9.5 percentage point increase from the end of last year, thanks to profit expansion and increased available capital due to rising interest rates.
Asset duration is 11.36 years, while liability duration is 10.10 years, resulting in a duration gap of 0.93 years.
Yoon Jong-guk, Hanwha Life's Chief Financial Officer, stated, "The improvement in insurance and investment profits, along with balanced growth from domestic and overseas subsidiaries, has strengthened our consolidated profit capacity. In the second half, we plan to enhance the competitiveness of our products centered on medium- and long-term whole life insurance and dementia and long-term care health insurance, while also advancing our AI-based sales support system to improve sales productivity and channel competitiveness."
* This article has been translated by AI.
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