South Korean non-life insurance companies likely would report better earnings for the July-September period thanks to improvement in auto insurance segment despite prolonged low-interest-rate environment.

According to Korea’s market data provider FnGuide on Sunday, net profits of most listed insurers in the third quarter have risen from the same period of the previous year.

Samsung Fire & Marine Insurance Co. that ranks first in the non-life insurance industry are estimated to have raked in 225.9 billion won ($199 million) in net profit in the third quarter, up 27.6 percent from the same period of last year. Other non-life insurers are also expected to report gains in net profit from last year with Dongbu Insurance Co. up by 32.6 percent, Hyundai Marine & Fire Insurance Co. by 29.9 percent, Meritz Fire & Marine Insurance Co. by 12.4 percent and Hanwha General Insurance Co. by 28.5 percent. Market analysts said such gains in non-life insurance are mainly attributed to decreased auto insurance loss ratio that had previously weighed on their performance.

According to Samsung Securities Co., the country’s top four non-life insurers - Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, Dongbu Insurance and KB Insurance Co. - are expected to see improvement in full-year profit in their auto insurance segment by between 300 billion won and 400 billion won from the previous year. Auto insurance premiums are forecast to have increased following enforcement of a new auto insurance law aimed at preventing motor insurance scams at the end of last month, as well as other various reforms including stricter rules on payments for minor damages and additional charges for vehicles with high repair costs.

Meanwhile, the country’s largest life insurer Samsung Life Insurance Co. would likely have benefited from one-off gain of 277 billion won from the sale of its headquarters building in Taepyeongno, downtown Seoul. Net profit of the second largest life insurer Hanwha Life Insurance Co. will likely have declined 7.3 percent on year due to the record-low interest rate that has resulted in poor investment returns.

By Park Joon-hyung

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