Shrinking pension market weighs on insurance sales
Bond, alternative investment valuation losses add pressure
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KB Life Insurance posted lower nine-month cumulative net profit compared with a year ago, as a contraction in the pension market weighed on insurance sales and rising market volatility triggered valuation losses on bonds and alternative investments.
According to third-quarter earnings disclosed by KB Financial Group on Thursday, KB Life Insurance's cumulative net profit for the period on a standalone basis came to 210.6 billion won ($158 million), down 17.3 percent from 254.8 billion won in the same period a year earlier. Net profit for the third quarter alone stood at 60 billion won, down 10.8 billion won from the previous quarter's 70.8 billion won.
Cumulative insurance operating profit for the nine-month period was 201.3 billion won, down 6.7 percent year on year. Contractual service margin amortization income rose 17.8 percent to 259.1 billion won, but the variance between actual and expected results swung to a loss of 36.4 billion won from a profit of 9.5 billion won in the same period a year earlier. Investment operating profit fell 55.6 percent year on year to 64.4 billion won, hurt by valuation losses on bonds and alternative investments.
The CSM balance at the end of the third quarter stood at 3.7 trillion won, up 15.8 percent from a year earlier and roughly in line with the previous quarter's 3.71 trillion won. New business annualized premium equivalent reached 552.6 billion won, while new business CSM came to 441.2 billion won, up 58 billion won from the same period a year earlier.
The solvency ratio under the Korean Insurance Capital Standard stood at 222.8 percent (provisional), down 30.7 percentage points from a year earlier.
won@heraldcorp.com
