Lotte Insurance reported a significant decline in its net profit for the second quarter of this year, dropping 96.4% compared to the same period last year. However, the company's capital adequacy indicators showed some improvement due to an increase in basic capital and net assets.
On August 14, Lotte Insurance announced that it recorded an operating profit of 3.1 billion won and a net profit of 1.3 billion won for the second quarter. These figures represent decreases of 93.6% and 96.4%, respectively, from the same period last year. Cumulatively, the company reported an operating loss of 25.4 billion won and a net loss of 18.5 billion won for the first half of the year, compared to an operating profit of 61.3 billion won and a net profit of 47.5 billion won in the first half of the previous year.
The insurance operating profit for the second quarter was 26.5 billion won, down 19.5% from 32.9 billion won in the same quarter last year. In contrast, investment income shifted from a profit of 15.4 billion won in the second quarter of last year to a loss of 23.5 billion won this year, primarily due to evaluation losses in interest-bearing assets and some foreign currency assets resulting from rising market interest rates.
For the first half of the year, the cumulative insurance operating profit was approximately 53.7 billion won, while the investment sector incurred a loss of about 79.2 billion won. The gross insurance premiums for long-term protection insurance in the second quarter reached 638.6 billion won, a 1.6% increase compared to the same period last year.
At the end of the second quarter, the insurance contract margin (CSM) stood at 22.431 trillion won, a decrease of 265.9 billion won from the previous quarter, reflecting adjustments made in accordance with the modernization of actuarial assumptions.
Capital indicators showed improvement. As of the end of the second quarter, the provisional basic capital was minus 91 billion won, an increase of approximately 259.8 billion won from minus 350.9 billion won at the end of the previous quarter. The basic capital K-ICS ratio rose by 16.0 percentage points, from -21.4% to -5.4%. However, both the basic capital and the basic capital K-ICS ratio remain in negative territory. Net assets increased by 288.8 billion won to 993.5 billion won, with the total K-ICS ratio reported at 161.9%.
* This article has been translated by AI.
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