Hanwha Life posts 96% surge in first-half net profit on dual gains in insurance, investment income

Hanwha Life Insurance announced Wednesday that its consolidated net profit for the period reached 904.5 billion won ($639 million) in the first half of this year, a 96% increase from the same period last year.

On a standalone basis, net profit came to 510.2 billion won, up 183.9% year on year, driven by simultaneous improvements in insurance and investment income. Insurance income rose 62% to 285.3 billion won, while investment income surged 776% to 354.8 billion won. Net profit attributable to controlling shareholders, reflecting ownership stakes in subsidiaries, climbed 119.8% to 771.9 billion won.

New-contract contractual service margin (CSM) reached 1.3 trillion won in the first half, up 40.5% from a year earlier — the highest first-half figure since the adoption of IFRS 17. By quarter, CSM came to 610.9 billion won in the first quarter and 689.2 billion won in the second. New-contract profitability — a measure of how much CSM accumulates relative to new-contract premiums — rose to 11.0 times from 7.2 times a year ago. Second-quarter whole-life insurance profitability climbed to 10.5 times as sales of medium- and long-term payment whole-life products increased, a key driver of the improvement. The company attributed the results to a restructured product portfolio centered on protection-type products and a shift toward profitability-focused sales strategies.

In-force contract CSM grew 214.8 billion won from the end of last year to 8.93 trillion won, as strong new-contract CSM inflows and a reduction in experience adjustments offset the impact of newly applied loss ratio and expense assumption guidelines. The 13th-month contract retention rate, a measure of sales efficiency, stood at 90.0%, while the number of financial planners affiliated with the company's captive general agency rose to 38,092.

Subsidiaries also lifted the consolidated results. Combined net profit from subsidiaries totaled about 500.9 billion won in the first half, with Hanwha General Insurance contributing 215.3 billion won, Hanwha Investment Securities 55.7 billion won, and overseas subsidiaries 103 billion won. That represents a gain of more than 60% over three years from 312 billion won in the first half of 2023. The share of overseas subsidiaries in consolidated net profit expanded to 11%.

The solvency ratio under the Korean Insurance Capital Standard (K-ICS) was estimated at 167%, up 9.5 percentage points from the end of last year, as available capital increased on higher earnings and rising interest rates. Asset and liability durations stood at 11.36 years and 10.10 years, respectively, leaving a duration gap of 0.93 years.

In the second half, Hanwha Life Insurance plans to continue targeting the protection market, focusing on medium- and long-term payment whole-life products alongside new dementia and long-term care products launched this year.

"New-contract CSM has reached its highest first-half level since the adoption of IFRS 17, underpinned by profitability-focused management centered on protection products and an improved product portfolio, and in-force contract CSM is also growing steadily," said Yoon Jong-guk, chief financial officer at Hanwha Life Insurance. "We will manage profitability and financial soundness in a balanced way, building on stable new-contract CSM generation and continued growth in in-force contract CSM."