DB Insurance posts W1.56tr in net profit through Q3, up 10.5%

DB Insurance said Thursday its cumulative net profit for the period through the third quarter reached 1.56 trillion won ($1.17 billion), up 10.5 percent from the same period last year. Sales rose 20 percent to 20.96 trillion won, while operating profit climbed 18.6 percent to 2.21 trillion won.

Cumulative insurance profit jumped 55.8 percent year-on-year to 1.3 trillion won, while investment profit fell 11.7 percent to 904.4 billion won.

For the third quarter alone, net profit for the period reached 444 billion won, up 35.5 percent from a year earlier. Sales rose 38.7 percent to 7.18 trillion won and operating profit grew 40.1 percent to 618.3 billion won. Insurance profit jumped 302.6 percent year-on-year to 467.3 billion won, while investment profit fell 53.6 percent to 151 billion won.

Breaking down results by product, long-term insurance profit rose 35.5 percent year-on-year to 309 billion won. DB Insurance said the quality of its in-force policies improved as the loss ratio stabilized and persistency rates strengthened, driven by premium adjustments and profitability-enhancement measures that also reduced losses from the gap between actual and expected claims payouts.

Auto insurance swung to a profit of 15.5 billion won. "The loss ratio improved significantly as seasonal factors such as heavy rainfall were less severe than last year," a company official said. The cumulative loss ratio stood at 84.3 percent, down 6.2 percentage points from a year ago.

General insurance also returned to profit, posting 6.2 billion won. The cumulative loss ratio improved 3.6 percentage points year-on-year to 71.9 percent. The company said profitability was secured through adjustments to its reinsurance strategy and tighter underwriting standards.

The K-ICS solvency ratio stood at 212 percent as of the end of September.

The contractual service margin, which reflects the long-term profitability of insurance contracts, stood at 13.4 trillion won on a gross written basis. New-contract CSM declined year-on-year due to a drop in new protection-type policies, but the overall CSM balance continued a steady net increase through ongoing lapse and policy-replacement management and improved persistency rates, DB Insurance said. The CSM balance grew by a net 836.6 billion won compared with the end of last year.

Overseas operations also maintained solid profitability. Fortegra, the company's US insurance subsidiary, posted a cumulative combined ratio of 88.9 percent and a cumulative return on equity of 18.9 percent this year. Under US accounting standards, Fortegra's third-quarter sales rose 5.4 percent year-on-year to $906.24 million. Its combined ratio improved 5.4 percentage points to 87.5 percent, and operating profit grew 9.3 percent to $80.7 million.

"Despite volatile domestic and external conditions including a stock market decline, we maintained solid earnings through improvements in insurance profit," a DB Insurance official said. "In the fourth quarter, we plan to proactively respond to market uncertainty, strengthen our core business competitiveness, and use Fortegra as a springboard to secure profit sources in the United States and Europe while prioritizing stable operations and synergy creation."