Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated pre-tax profit for the first half of 2024 was KRW1,723.8 billion, with net profit up 8.2% year-over-year.
- Long-term insurance sales grew by 24.3% on-year, expanding market dominance despite increased competition.
- First half insurance profit increased by 5.3% year-over-year, maintaining an upward trend.
- Investment yield improved to 3.5%, up 0.36 percentage points year-over-year, with investment profit increasing by 17.9%.
- Efforts to enhance product competitiveness and efficiency are expected to sustain growth in CSM volume, a future profit source.
Negative Points
- Auto insurance profit decreased by 26.1% year-over-year due to a higher loss ratio, despite revenue sustaining last year's level.
- General insurance profit fell by 18% year-over-year, driven by an increase in high loss events and a higher loss ratio.
- The company anticipates financial market uncertainties in the second half, including real estate financing issues and geopolitical tensions.
- CSM multiple fell to 14.9x, indicating challenges in maintaining new business profitability.
- The loss ratio for auto insurance increased by 2.2 percentage points year-over-year, reflecting challenges in managing claims efficiency.
Q & A Highlights
Q: Can you elaborate on the strategies for maintaining growth in the long-term insurance segment amidst increasing market competition?
A: Jun Ha Kim, CFO and EVP, explained that despite the competitive market, particularly in healthcare insurance, Samsung Fire & Marine Insurance launched new and competitive products and adopted a strategic approach towards the GA channel. This resulted in KRW18.3 billion of monthly average sales for protection new premium, growing 24.3% year-over-year, thereby expanding market dominance.
Q: What measures are being taken to address the rising loss ratio in the auto insurance segment?
A: Jun Ha Kim noted that despite a 2.2 percentage point increase in the loss ratio due to rate cuts, the company is focusing on loss management and strengthening claims efficiency. They aim to continue achieving reinsurance profit amidst seasonal volatilities and enhance non-price competitiveness to broaden their customer base.
Q: How is the company planning to manage the high loss events impacting the general insurance segment?
A: The CFO highlighted that the company plans to diversify its portfolio and maintain a profit-centric pricing and underwriting stance. They will also bolster activities around accident prevention and safety management to ensure a steady bottom line despite the increase in high loss events.
Q: What are the expectations for the investment environment in the second half of the year, and how is the company preparing for it?
A: Jun Ha Kim mentioned that the company anticipates uncertainties in the financial market, including real estate project financing issues and rising geopolitical tensions. They plan to review and adjust portfolio strategies and conduct rigorous risk monitoring to ensure sound asset quality management, ultimately driving enhanced profitability.
Q: What are the key focus areas for Samsung Fire & Marine Insurance in the second half of FY24?
A: The CFO stated that the company will focus on strengthening the competitiveness of products with high CSM margins, improving persistency, loss ratio, and expense ratio. They aim to sustain growth of CSM volume, discover new growth engines aligned with demographic and market changes, and establish a mid to long-term business plan for sustained growth and shareholder value enhancement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
