Shinhan Life marks 5th anniversary as top non-bank earner in Shinhan Financial Group

Shinhan Life Insurance is set to mark the fifth anniversary of its integrated launch on Wednesday. The insurer debuted as the industry's fourth-largest player when Shinhan Life and Orange Life merged in 2021 and has since climbed to the top of Shinhan Financial Group's non-bank affiliates in net profit. Building on five years of growth in both scale and quality, the company has shifted its management focus this year from "proving growth" to "proving sustainability."

According to the insurance industry, Shinhan Life will hold a management strategy meeting on Wednesday — its fifth anniversary — chaired by CEO Cheon Sang-young. The meeting is expected to review the company's performance since its launch and lay out its direction for the second half of the year and beyond.

Shinhan Life was formed on July 1, 2021, by merging Shinhan Life with Orange Life — formerly ING Life, which Shinhan Financial acquired from private equity fund MBK Partners in 2019. The merger was a strategic bet to shift the group's center of gravity away from banking and credit cards and into insurance.

Earnings have climbed steadily each year since. On a consolidated basis, net profit grew from 174.8 billion won ($113 million) in its first year to 507.7 billion won last year, sustaining the 500 billion won threshold for two consecutive years. On a standalone basis — excluding overseas subsidiaries — the company posted 515.9 billion won last year, ranking third in the industry behind Samsung Life Insurance (1.69 trillion won) and Kyobo Life (763.2 billion won). Notably, it surpassed Shinhan Card (476.7 billion won) within the group to claim the top spot among non-bank affiliates, accounting for 10.2 percent of the group's total net profit.

Quality indicators also improved. Insurance profit rose 6.3 percent year-on-year to 694.9 billion won last year, while the contractual service margin — a measure of future profits discounted to present value — grew to 7.55 trillion won at the end of last year. Its K-ICS solvency ratio, which gauges an insurer's ability to pay claims, stood at 206 percent, the highest among the four major life insurers. The gains reflect a deliberate shift toward protection-type policies, with new contracts in that segment approaching 15 trillion won.

CEO Cheon has set "balanced growth" under the banner of "Trust First" as this year's management direction. The strategy calls for stepping back from aggressive volume competition and instead raising the quality of sales by focusing on higher-margin contracts. Shortly after taking office, Cheon established a dedicated unit to manage the loss ratio and tightened consumer protection and internal controls.

The company is also looking beyond insurance for future growth. In 2024, it established Shinhan Life Care, a subsidiary dedicated to senior care services, and opened a premium single-occupancy care facility called SOLACE Home Misa in Hanam, Gyeonggi Province, in January. It has since expanded into a day-care center in Bundang, Seongnam, and a mixed-use facility in Haeundae, Busan. On the digital front, the company followed its rapid insurance payout service "S-Pass" with the industry's first natural-language policy design system, "Life Copilot (LICO)," launched this year.

Cheon is also expected to focus on near-term challenges, including improving earnings amid heightened volatility. First-quarter net profit came in at 103.1 billion won, down 37.6 percent from a year earlier. Investment income swung to a loss due to bond valuation losses from rising market interest rates, compounded by heavier-than-expected actual insurance payouts relative to projections. With last year's return on invested assets at 2.9 percent — below the industry average of 3.3 percent — strengthening asset management capabilities is another priority. Capital has also contracted over the past year amid rate and market swings, and pressure on capital management is mounting ahead of the introduction of a basic capital regime next year.

Future businesses will also weigh on costs for now. Shinhan Life Care, which handles the senior care operations, posted a net loss of 2.3 billion won last year. Its Vietnam subsidiary, which began operations in 2022, also faces the urgent task of turning profitable.