Tongyang Life posts W91.9b net profit in H1, up 11.5%

Tongyang Life Insurance, the insurance affiliate of Woori Financial Group, said Monday its first-half net profit reached 91.9 billion won ($62.7 million), up 11.5 percent from the same period a year earlier.

Second-quarter net profit came in at 66.9 billion won, a 168 percent jump from the 25 billion won recorded in the first quarter. A company official attributed the improvement to expanded sales of long-term payment whole-life insurance products, including the recently launched "Woori WON Haeneun 7Bae Deo Haengbokan Plus Whole Life Insurance," saying protection-type insurance gains drove the profitability improvement reflected in the earnings.

Key business indicators also improved. Second-quarter new business annualized premium equivalent, or APE, rose about 48.4 percent from the first quarter to 206.5 billion won, up from 139.2 billion won. The cumulative first-half APE reached 345.7 billion won. New business APE converts premiums received from new contracts into an annualized figure and is used to gauge an insurer's new business growth rate.

Second-quarter new business contractual service margin, or CSM, also rose about 56.7 percent from the previous quarter to 148 billion won, up from 94.5 billion won. New business CSM measures the present value of expected future profits from newly signed contracts; a higher figure indicates greater profitability from new business.

"Through expanding protection-type new contracts, we have achieved both top-line growth and profit improvement under a profitability-focused sales strategy, realizing quantitative and qualitative growth simultaneously," a company official said.

The company's financial soundness indicator also improved. Driven by efforts to strengthen capital adequacy — including expanding available capital and reducing required capital — the preliminary K-ICS (Korea Insurance Capital Standard) solvency ratio for the first half stood at 205 percent, up 28 percentage points from 177 percent in the same period last year.

"We are building a stable channel portfolio and continuing to pursue sales grounded in profitability and risk management," a company official said. "Going forward, we will continue to manage earnings and financial soundness in a balanced manner while further strengthening our medium- to long-term growth foundation."

Meanwhile, Woori Financial Group's board approved a comprehensive share swap on Friday to make Tongyang Life Insurance a wholly owned subsidiary. The share exchange is scheduled for Aug. 11, with new Woori Financial shares set to list on Aug. 31. Once Tongyang Life Insurance is delisted from the KOSPI, it will become a wholly owned subsidiary of Woori Financial.