Regulatory Changes, Investment Losses... Mirae Asset Life Insurance's Nine-Month Net Income Falls 70.1%

CSM Continued to Grow...K-ICS Ratio at 147.3%, Down 29.4 Percentage Points

Mirae Asset Life Insurance's net income for the first nine months of this year fell 70.1% from a year earlier. The decline was due to changes in the financial authorities' guidelines on actuarial assumptions and valuation losses on alternative investment assets. Its contractual service margin (CSM) on in-force insurance contracts increased as it expanded new business, led by health insurance.

Mirae Asset Life Insurance headquarters in Mapo-gu, Seoul. Mirae Asset Life Insurance

Mirae Asset Life Insurance said on the 13th that its consolidated net income for the first nine months of the year was 37.5 billion won, while pretax profit came to 45.3 billion won. These figures were down 70.1% and 72.3%, respectively, from the same period last year.

Insurance results reflected a 70.7 billion won impact from regulatory changes resulting from the application of the Financial Supervisory Service's guidelines on actuarial assumptions. Investment results showed a loss of 9.2 billion won, affected by valuation losses on alternative investment assets and other factors.

Excluding the impact of the regulatory changes, however, insurance profit rose to 125.2 billion won from 117.9 billion won in the same period last year. Mirae Asset Life Insurance said that, excluding one-off factors arising from the regulatory changes, profitability in its core insurance business had improved.

For the third quarter alone, the company posted a net loss of 33.9 billion won, swinging to a loss. Pretax profit was also negative at 44 billion won over the same period.

The contractual service margin (CSM), which indicates the long-term profitability of insurance contracts, continued to grow. At the end of the third quarter, consolidated CSM on in-force contracts stood at 2.3205 trillion won, up 12.7% from the end of last year. CSM from new business for the first nine months totaled 411.1 billion won, up 3.7% from a year earlier.

Health and accident insurance drove the increase in new business. CSM from health and accident insurance new business for the first nine months reached 348.9 billion won, up 10.6% year on year. Its share of total new-business CSM rose 5.3 percentage points from the same period last year to 84.9%.

Annualized premiums equivalent (APE) for new protection-type policies increased 23.5% year on year to 293.8 billion won. The company strengthened the profitability-focused mix of its new business by expanding sales of protection-type products, particularly health insurance.

The variable insurance segment also continued to grow. Variable insurance reserves stood at 14.194 trillion won at the end of the third quarter, up 10.8% from a year earlier. Fee income from variable insurance rose 21.0% to 45.7 billion won.

Mirae Asset Life Insurance's estimated ratio under the Korean Insurance Capital Standard (K-ICS) stood at 147.3% at the end of the third quarter, down 29.4 percentage points from the end of last year.

Mirae Asset Financial Services, the company's subsidiary general agency (GA), posted pretax profit of 7.6 billion won for the first nine months, up 44.1% year on year. Revenue increased 21.2% to 233.2 billion won.

A Mirae Asset Life Insurance representative said, "This year, profits declined due to the application of the revised guidelines on actuarial assumptions and increased volatility in financial markets, but CSM on in-force contracts grew as we expanded new business, led by health insurance. We will strengthen loss-ratio management, secure new business focused on profitability, and reinforce asset-liability management (ALM) to build a stable earnings base."

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