KB Life Insurance’s New-Business CSM Rises 21.2% in First Half, Expanding Future Earnings Base

[Financial News] KB Life Insurance is expanding its future earnings base by broadening its business structure beyond whole life insurance to include health and annuity insurance. Since President Jeong Mun-cheol took office, the company’s efforts to diversify its product, channel and business portfolios appear to be driving CSM growth.
According to the insurance industry on the 18th, KB Life Insurance’s new-business CSM reached KRW 282.7 billion in the first half of this year, up 21.2% from KRW 233.2 billion a year earlier. The CSM balance on in-force contracts also increased by KRW 450.3 billion, from KRW 3.2638 trillion at the end of last year to KRW 3.7141 trillion at the end of June. This represented a 20.3% increase from the same period a year earlier.
CSM refers to the funds that can be recognized as profit as insurance services are provided in the future under an insurance contract. An increase in new-business CSM means that the future earnings base secured through new contracts has expanded. However, higher CSM does not directly translate into increased current-period profit. Actual earnings may vary depending on policy persistency, loss ratios and distribution costs.
KB Life Insurance is expanding its health and annuity insurance offerings. By broadening its product mix beyond whole life insurance to cover diseases and retirement income, the company is seeking to diversify its earnings base across products.
Its sales channels are also changing. The company is strengthening the competitiveness of its subsidiary general agency, KB Life Partners, including through a KRW 20 billion paid-in capital increase last year, while also expanding external general agencies and online channels. The move is intended to reduce reliance on any single sales channel and broaden customer access points.
The care services business is also emerging as a new growth pillar. KB Life Insurance is expanding its business base by operating care facilities through its subsidiary KB Golden Life Care. At the KB Life Yeoksam Center in KB Life Tower in Yeoksam-dong, Seoul, the company provides consultations on insurance coverage, retirement and wealth management, and care and caregiving.
However, expanding business areas does not necessarily lead to immediate improvements in profitability. The company must stably manage policy persistency and loss ratios for health and annuity insurance, as well as distribution costs for general agencies. Its care services business must also secure profitability after accounting for facility investments and operating expenses.
An insurance industry official said, "KB Life Insurance is broadening its focus from whole life insurance to health and annuity insurance while diversifying its sales channels and expanding into the care services business." The official added, "Going forward, it will be important to sustain the growth in CSM while securing profitability and capital efficiency across each business area."
[email protected] Hong Ye-ji Reporter