Shinhan Life Posts Q3 YTD Net Profit of 419.4 Billion Won... CSM Tops 8 Trillion Won, a Record High

K-ICS ratio at 204.6%... "Long-term value-driven management to generate future earnings"

Shinhan Life's contract service margin (CSM), an indicator of an insurer's future profitability, surpassed 8 trillion won, reaching a record high. Its year-to-date net profit through the third quarter declined.

Shinhan Life's headquarters in Jung-gu, Seoul. Shinhan Life

Shinhan Life said on October 27 that its year-to-date net profit through the third quarter was 419.4 billion won, down 18.5% from the same period last year. Net profit for the third quarter was 128.8 billion won, down 31.3% from the previous quarter.

Insurance profit fell 17.3% year on year to 474.4 billion won, reflecting one-off factors and other items. However, third-quarter insurance profit rose 14.8%, or 21.9 billion won, from the previous quarter.

Financial profit fell 25.7% year on year to 132.9 billion won, as bond valuation and disposal gains declined amid increased volatility in financial markets.

Cumulative annualized premium equivalent (APE) for the first three quarters was 1.1492 trillion won, down 7.3% from the same period last year. APE for protection-type insurance fell 17.8% year on year to 928.3 billion won, reflecting a base effect from adjustments to the product portfolio. In contrast, APE for savings-type and annuity insurance rose 99% to 220.9 billion won, driven by expanded sales.

New-business CSM, an indicator of future profitability, totaled 1.1379 trillion won for the first three quarters, up 421.8 billion won from the first half.

CSM for in-force contracts stood at 8.0423 trillion won at the end of the third quarter, up 433.1 billion won (5.7%) from a year earlier and marking a record high. It also rose 127.6 billion won (1.6%) from the end of the previous quarter.

CSM is an indicator of the present value of profits expected to be generated from insurance contracts in the future. Shinhan Life's CSM for in-force contracts rose from 7.9147 trillion won at the end of the first half of this year to more than 8 trillion won at the end of the third quarter.

A Shinhan Life official said, "The CSM surpassed 8 trillion won in the third quarter and hit a record high because we focused on solid growth and enhancing future value rather than short-term results. We will continue to pursue long-term, value-driven management to generate sustainable future earnings and ensure the stable management of customer assets, drawing on our solid capital position."

The insurer's K-ICS (Korea-Insurance Capital Standard) ratio, a measure of capital adequacy, was 204.6% on a provisional basis, down 5.8 percentage points from 210.4% in the previous quarter.

A Shinhan Life official said, "Because insurance is a long-term industry in which we accompany our customers throughout their lives, we take a long-term approach to value-driven management to generate sustainable future earnings and manage customer assets stably. We will continue to make customer trust the starting point for all our management decisions, innovate continuously, and grow into a company with a solid foundation that delivers greater value to our customers."

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