South Korea’s top life insurer Samsung Life Insurance Co. saw its net profit rise by 19.7 percent in 2023, thanks to its efforts to expand the sales of highly profitable health insurance products and stable asset management performance.

Samsung Life Insurance announced Tuesday that its net profit stood at 1.89 trillion won ($1.41 billion) in 2023, up 19.7 percent from the previous year’s 1.58 trillion won.

The company’s contractual service margin (CSM), a barometer of future earnings, came to 12.2 trillion won as of the end of 2023, up 14 percent from 10.7 trillion won during the same period a year ago.

New contract CSM, in particular, stood at 3.6 trillion won, driven by the strengthening of its health insurance product lineup.

Samsung Life Insurance has been focusing on selling highly profitable health insurance since the second half of 2023.

Health insurance accounted for only 32 percent of total CSM until the first quarter of the year but it increased to 45 percent in the fourth quarter.

In the fourth quarter alone, the share of health insurance surpassed that of whole life insurance (death insurance). Samsung Life Insurance’s health insurance is estimated to be more than twice as profitable as whole life insurance.

“We plan to shift the ratio of health insurance to whole life insurance from 4 to 6 to 6 to 4 in 2024,” said a Samsung Life Insurance official.

Samsung Life Insurance’s assets totaled 314.7 trillion won as of end of December 2023, with its capital adequacy ratio (K-ICS), a measure of capital strength, reaching up to 250 percent, ranking the highest among industry players.

The company’s risk exposure related to real estate project financing (PF) was 4.7 trillion won, or 2.3 percent of total assets under management during the same period.

Its exposure to overseas real estate, which has recently come under scrutiny, was 5.2 trillion won, or 2.5 percent of total assets under management.

Samsung Life Insurance plans to announce its shareholder return policy in line with the government’s corporate value-up program planned next week.

By Yoo Joon-ho, Park Na-eun, and Yoon Yeon-hae

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]