Shinhan Life's First-Half Net Profit Down 15.6%... CSM Rises to KRW 8 Trillion

CSM Up 2%... K-ICS Ratio at 212%
Solid Fundamentals in Profitability and Capital Adequacy

Although Shinhan Life's net profit decreased during the first half of the year, the company's Contractual Service Margin (CSM)—a forward-looking indicator of profitability for insurance companies—and its capital adequacy have both improved.

Shinhan Life Headquarters, Jung-gu, Seoul. Shinhan Life

Shinhan Life announced on July 23 that its net profit for the first half of the year was KRW 290.6 billion, a 15.6% decrease compared to the same period last year. However, its net profit for the second quarter was KRW 187.5 billion, up KRW 138.1 billion from the first quarter.

The company attributed its results to a strategy focused on maintaining robust capital buffers and building a strong CSM portfolio, despite prolonged uncertainty in domestic and global economic conditions and changes in the financial market environment.

The Annualized Premium Equivalent (APE) for the first half reached KRW 722.9 billion, a 5.2% (KRW 35.8 billion) increase year-on-year.

The protection-type insurance APE was KRW 583.4 billion, down 6.7% (KRW 42.2 billion) from the same period last year. In contrast, APE for savings and annuity insurance products rose to KRW 139.4 billion, a substantial increase of 126.9% (KRW 78.0 billion), driven by strong sales.

New contract CSM came to KRW 716.1 billion, a year-on-year increase of KRW 11.6 billion (1.6%).

A company spokesperson commented, "We are seeing tangible results in our efforts to focus on intrinsic, value-driven management for long-term growth."

CSM for in-force contracts stood at KRW 7.9 trillion—up KRW 650.1 billion (8.9%) compared to the end of the first half of last year, and increased KRW 189.8 billion (2.5%) from the previous quarter’s end.

CSM refers to a core metric for insurance companies, representing the present value of profits expected to be generated in the future.

Shinhan Life's CSM balance grew by KRW 1 trillion compared to KRW 6.9 trillion in June 2022, the year after its launch, reaching this cumulative total in the first half of this year.

As of the end of last month, total assets amounted to KRW 59 trillion, up 2.3% from the previous quarter.

The provisional ratio under the insurance industry’s new Capital Adequacy Regime (K-ICS) stood at 212%. Shinhan Life continues its value-based Asset-Liability Management (ALM) strategies from a mid- to long-term perspective, maintaining top-tier financial stability within the industry.

A company representative added, "We are continuously pursuing value-driven ALM strategies to enhance our profit-oriented product portfolio and to build a sound financial foundation for qualitative growth. Moving forward, we will continue our stable growth, prioritizing customer trust as our core value and striving to become a leading insurance company in the industry."

This content was produced with the assistance of AI translation services.