The headquarters of Hanwha General Insurance in Yeouido, Seoul. [Hanwha General Insurance]
The headquarters of Hanwha General Insurance in Yeouido, Seoul. [Hanwha General Insurance]

Hanwha General Insurance set a new quarterly record for new-contract contractual service margin (CSM) in the second quarter, securing 327.2 billion won ($231 million). Net profit for the period climbed 45.6% year-on-year to 116.4 billion won, driven by improved per-contract profitability.

The insurer announced Wednesday that its second-quarter sales reached 1.98 trillion won, up 15.4% from 1.71 trillion won in the same period last year. Cumulative first-half sales rose 18.9% to 3.95 trillion won.

New-contract CSM of 327.2 billion won surpassed both the year-earlier figure of 261.9 billion won — a gain of 24.9% — and the previous quarterly record of 302.4 billion won set in the first quarter. Monthly average new long-term protection contracts, however, dipped to 7.73 billion won from 8 billion won in the first quarter. The new-contract CSM multiple — which measures how many times the CSM stacks up against new-contract premiums — rose to 14.1x in the second quarter, topping the 11.7x recorded a year earlier and the 12.5x of the prior quarter. The company attributed the improvement to a rate increase and tighter underwriting standards introduced in April.

Breaking down quarterly long-term protection new contracts by coverage type, illness coverage grew to 19.3 billion won from 17.5 billion won a year earlier, accounting for 83% of the total. Driver coverage shrank to 700 million won from 1.8 billion won, and accident coverage fell to 300 million won from 400 million won. The share of women's products in personal protection new contracts expanded to 29% from 19%. In-force CSM stood at 4.42 trillion won, up 7.2% year-on-year and equivalent to 96% of the full-year target of 4.6 trillion won.

Long-term insurance drove the profit improvement. Second-quarter long-term insurance profit reached 113.8 billion won, up 20 billion won from a year earlier. The gap between actual and expected insurance claims swung to a positive 14.9 billion won from a negative 8.6 billion won, and CSM amortization income rose 8.1% to 114 billion won. The loss ratio for actual-loss coverage improved to 116.5% from 124.3% in the first quarter, and the risk loss ratio fell to 98.8% from 104.6%. The 13th-month policy retention rate improved to 87.1%.

Auto insurance posted an operating loss of 17.2 billion won despite insurance revenue surging 78.6% to 286.7 billion won, as per-claim losses rose. The deficit widened by 11.4 billion won from the same period last year, bringing the cumulative first-half loss to 43.7 billion won. General insurance also recorded a loss of 5.3 billion won due to large-scale accident claims.

Cumulative first-half net profit came in at 215.3 billion won, down 3.3% year-on-year. The decline reflected a base effect from approximately 60 billion won in non-recurring gains — including actuarial assumption changes and the reversal of investment losses — booked in the first half of last year.

The Korea Insurance Capital Standard (K-ICS) solvency ratio as of end-June was estimated at 185%, or 228% after transitional measures.

"Sales of long-term protection products are growing across all distribution channels," a Hanwha General Insurance official said. "We will maintain our CSM-focused sales strategy in the second half and expand our differentiated product pipeline."


psj@heraldcorp.com