Several Korean life and non-life insurance companies saw declines in earnings for the 2019 financial year, hit by falling interest rates and a prolonged economic slowdown.
Samsung Life Insurance, the nation’s largest life insurer, maintained its leading position despite a great decline in net profit. The company reported a net profit of KRW1.05tn ($892m) last year, down 39.3% from the previous year, reported The Korea Times.Hanwha Life, the country’s second largest life insurer, generated the lowest net profit among major life insurers. It posted net profit of KRW57.1bn in 2019, down by 87.2% from a year ago.
Samsung Fire & Marine Insurance, the country’s biggest property insurer, posted KRW647.8bn in net profit for 2019, down by 39.5% from 2018. Other non-life insurers swung into the red last year. Meritz Fire & Marine was the only insurer to report growth in yearly earnings. The company generated KRW301.3bn in net profit in 2019, up by 28.9% year-on-year.
Market watchers said insurers will continue to struggle in 2020, as a prolonged period of low interest rates keeps affecting their businesses and pushing down investment gains. The outlook for insurers’ near-term rebound looks murky, as the Bank of Korea has hinted at the possibility of cutting the key interest rate from the current record low of 1.25% down to 1%.