Financial Supervisory Service Governor Lee Bok-hyun (fifth from left) poses with CEOs of South Korean insurance companies after a meeting in January 2023
DB Insurance Co. raked in the biggest profits from overseas operations among South Korean insurance companies in the first half of this year, leading domestic insurers’ global expansion to make up for stagnant domestic revenue amid the low birth rate.
Four South Korean life insurance companies and five domestic non-life insurers with overseas operations posted a combined 155.2 billion won ($115 million) in net profit from global businesses in the first half of this year, according to an analysis conducted by The Korea Economic Daily (KED) on Tuesday.
The figure represented a 135.9% spike compared with a 65.8 billion won net profit in the same period of last year.
The companies surveyed are Samsung Life Insurance Co., Kyobo Life Insurance Co., Hanwha Life Insurance Co. and Shinhan Life Insurance Co., as well as Samsung Fire & Marine Insurance Co., DB Insurance Co., Hyundai Marie & Fire Insurance Co., KB Insurance Co. and Meritz Fire & Marine Insurance Co.
They have foreign branches or overseas arms, in which they have a 50% stake or more.
DB Insurance makes up about half of the combined profit in the January-June period. It earned 62.7 billion won from overseas operations in the period, including its wholly-owned US arm John Mullen & Company and branches in Guam, Hawaii, New York and California.
DB Insurance turned to the black after logging a net loss of 2.4 billion won in the year-earlier period in the aftermath of the typhoon Mawar that battered Guam in the first half of 2023.
Insurance premiums it collected from policy holders jumped 28.4% on-year to 320.7 billion won compared with the year-earlier period.
DB Insurance has been expanding its global footprint not only with the establishment of overseas units, but also with stake investments. The Post and Telecommunication Joint Stock Insurance Corporation (PTI) in Vietnam posted 11.2 billion won in net profit in the first half of this year. DB Insurance holds a 37% stake in PTI.
In April, it acquired a 75% stake in Saigon-Hanoi Insurance Corporation (BSH) and Vietnam National Aviation Insurance (VNI), respectively.
Samsung Fire & Marine Insurance’s headquarters
In comparison, Samsung Fire & Marine Insurance Co., South Korea’s No. 1 non-life insurer, garnered a net profit of 28.6 billion won from overseas units and branches spanning Europe, Vietnam, Singapore and Indonesia.
That marked a 6.3% rise on-year. They collected 292.9 billion won in premiums from overseas operations, up 35.1% on-year.
Among life insurance companies, Hanwha Life Insurance and Samsung Life Insurance stood out.
Hanwha reported a 15.2% gain to 26.9 billion won in first-half net profit from overseas operations. Its Vietnamese unit reaped 30.6 billion won in net profit, a 29.1% jump on-year. It accounted for more than 10% of Hanwha’s first-half overseas income in total.
Samsung Life Insurance’s overseas business enjoyed more than a twofold surge to 22.6 billion won in first-half net profit compared with the year prior.
Its Thai arm, the first overseas arm established by a South Korean life insurance company, swung to a net profit of 14.4 billion won in the first half from the shortfall of 500 million won in the year-earlier period.
Hanwha Life Insurance’s headquarters, a 63-story skeyscaper in Yeouido, Seoul
Still, overseas operations make a negligible contribution to domestic insurance companies’ earnings. For DB, overseas profits are just 5% of its total net profits.
“South Korea is the world’s seventh-largest insurance market, but none of domestic insurance companies has joined the ranks of global companies,” said an insurance industry official. “Overseas businesses will be the key to their future growth.”
Last year, Samsung Life acquired a 20% stake in Paris-based infrastructure investment firm Meridiam SAS to become its second-largest shareholder.
By Hyeong-Gyo Seo
seogyo@hankyung.com
Yeonhee Kim edited this article
