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Biz News Korea(Eng)
S. Korean insurance firms struggle over losses in the U.S
- Collected
- 2016.11.10
- Distributed
- 2016.11.14
- Source
- Go Direct
According to insurance industry and financial authority sources on Wednesday, Samsung Fire & Marine Insurance Co.’s subsidiary in the U.S built up losses amounting to $8.8 million until the first half of this year and its full-year loss is expected to reach $30 million this year.
Market experts predict Samsung’s U.S subsidiary would have to secure loss reserves worth tens of millions dollars in preparation for future insurance payouts and improve its financial health.
As of the first half of this year, Samsung’s U.S subsidiary has capital of $41.7 million and it needs $25.3 million worth of fresh fund in order to bring up its capital to the level of the first half of 2014 with $67 million. Market observers estimate the insurer needs additional $34 million to make up for the losses from the first half and prepare for the rest of the year. It accounts for more than 5 percent of its parent Samsung Fire & Marine Insurance’s September-quarter net profit with 755.6 billion won ($657.8 million).
The countries’ other general insurance firms Dongbu Insurance Co. and KB Insurance Co. that started U.S operation in 1984 and 2005, respectively, are also having a bad year in the U.S. Dongbu’s U.S subsidiary posted $3.4 million in net profit in 2015 first half but incurred $9.5 million worth loss in the first half this year.
The Korean general insurance firms have been forced to make large-than-expanded payouts on commercial general liability products.
By Park Joon-hyung
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]