Insurance companies and credit finance firms reported increased net profits for the first half of the year. Gains from the disposal and valuation of financial assets boosted insurance firms, while credit sales and investment-related income improved results for card and capital companies. However, rising delinquency rates in card loans and non-card lenders continue to raise concerns about financial stability.
According to the Financial Supervisory Service on August 27, the net profit of 52 insurance companies for the first half of the year reached 9.138 trillion won, an increase of 1.366 trillion won (13.0%) compared to the same period last year.
Life insurance companies reported a net profit of 3.9254 trillion won, up 17.7%. Although insurance profits decreased by 685 billion won due to loss burden costs and valuation losses, investment profits improved by 912.6 billion won thanks to increased interest, dividend income, and gains from the disposal and valuation of financial assets.
Non-life insurance companies saw a net profit of 5.0884 trillion won, a 9.6% increase. Investment profits rose by 255.7 billion won, and insurance profits improved by 531 billion won due to recoveries from loss contracts and better performance in general insurance.
The total premium income for insurance companies reached 134.9348 trillion won, an 8.5% increase. Life insurers saw growth in protection insurance and retirement pensions, increasing by 10.8% and 18.4%, respectively, while non-life insurers experienced growth across long-term, automobile, and general insurance as well as retirement pensions.
Card and capital companies also improved their profitability. The net profit of eight major card companies reached 1.2934 trillion won, a 5.6% increase. Although card loan income decreased, increased commission income from merchants and installment cards, along with reduced bad debt expenses, contributed to the growth. However, after accounting for bad debt reserves, net profit fell by 26.0% to 926.6 billion won due to a significant increase in reserve allocations.
Non-card lenders, including installment finance, leasing, and new technology finance companies, reported a net profit of 2.2352 trillion won, a 25.4% increase. Income from securities and new technology finance rose by 29.9% and 28.6%, respectively, while bad debt expenses decreased by 12.9%.
However, indicators of financial stability worsened. As of the end of June, the overall delinquency rate for card companies was 1.54%, up 0.02 percentage points from the end of last year. The delinquency rate for card loans rose to 3.35%, an increase of 0.14 percentage points. The delinquency rate for non-card lenders also increased to 2.29%, up 0.18 percentage points, while the ratio of non-performing loans rose to 2.85%, a 0.19 percentage point increase.
* This article has been translated by AI.
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