Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Samsung Fire & Marine Insurance Co Ltd (XKRX:000810, Financial) reported a consolidated pretax income of 743.8 billion won for Q3 2024.
- The company achieved a 13.8% year-over-year increase in cumulative net profit, reaching 1 trillion 866.5 billion won.
- Long-term insurance profits rose by 2.9% year-over-year, supported by increased CSM amortization and strong product competitiveness.
- Commercial insurance revenue increased by 10.4% year-over-year, driven by growth in both domestic and global markets.
- Investment yields improved to 3.46%, with cumulative investment profit up 23.9% year-over-year, aided by enhanced operational efficiency and valuation gains on alternative investments.
Negative Points
- Auto insurance profits fell by 66% year-over-year in Q3 due to rate cuts and increased competition.
- The cumulative combined ratio for auto insurance was reported at 96.1%, indicating challenges in managing claims efficiency.
- Commercial insurance faced a 5.4% point increase in loss ratio due to high-risk events, leading to a 22.9% year-over-year decline in cumulative insurance profit.
- Despite revenue growth, the commercial insurance segment's profitability was negatively impacted by increased loss ratios.
- The company faces ongoing competitive pressures in the auto insurance market, affecting top-line revenue growth.
Q & A Highlights
Q: Can you provide more details on the factors driving the increase in long-term insurance profits?
A: The Head of IR, Kim Jae Hong, explained that the increase in long-term insurance profits, which rose by 2.9% year over year, was primarily due to an increase in CSM amortization and a steady level of experience variance. This was supported by stronger product competitiveness and proactive channel strategies.
Q: What were the main challenges faced by the auto insurance segment this quarter?
A: Kim Jae Hong noted that the auto insurance segment faced challenges due to the impact of rate cuts and increased competition for top-line revenue, resulting in a 66% year-over-year decline in Q3 insurance profit. However, by managing claims efficiency, the cumulative combined ratio was maintained at 96.1%, sustaining a profit streak.
Q: How did commercial insurance perform, and what were the contributing factors to its results?
A: The commercial insurance segment saw a 10.4% increase in revenue due to growth in both domestic and global businesses. However, high-risk events led to a 5.4% increase in the loss ratio year over year, which drove cumulative insurance profit down by 22.9% to 150.1 billion.
Q: Could you elaborate on the investment performance and its impact on overall earnings?
A: Kim Jae Hong highlighted that investment yields improved to 3.46%, up 0.5 percentage points, due to enhanced operational efficiency and increased valuation gains on alternative investments. This resulted in a cumulative investment profit of 2 trillion 98.6 billion, up 23.9% year over year.
Q: What are the future strategic priorities for Samsung Fire & Marine Insurance?
A: While specific future strategies were not detailed in the Q&A, the focus remains on enhancing product competitiveness, managing claims efficiency, and expanding investment yields to sustain profitability and growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
