Core businesses held up, but investment results weigh on KB Insurance and KB Life

[Financial News] KB Financial Group’s insurance affiliates both increased insurance profit, their core business, in the third quarter of this year compared with the previous quarter. However, investment profit from asset management fell sharply due to valuation losses on bonds and other assets as interest rates rose.
KB Insurance reported third-quarter insurance profit of 301.5 billion won for this year on the 29th. This was up 17.0% from 257.8 billion won in the previous quarter. Cumulative insurance profit through the third quarter this year also rose 13.1% to 742.1 billion won, from 655.9 billion won in the same period last year.
KB Life Insurance’s third-quarter insurance profit also expanded 20.0% to 73.7 billion won, from 61.4 billion won in the previous quarter. However, on a year-to-date basis, it fell 6.7%, from 215.8 billion won last year to 201.3 billion won.
Investment performance declined at both companies. KB Insurance recorded investment losses of 31.6 billion won in the third quarter. It had posted investment income of 127.4 billion won in the previous quarter. Cumulative investment income for the first three quarters of this year also fell 43.2%, from 394.2 billion won last year to 224 billion won.
KB Life also narrowly avoided a loss, posting investment income of 3 billion won in the third quarter. On a cumulative basis, the figure was more than halved from 145.2 billion won last year to 64.4 billion won.
As a result, cumulative net income for the first three quarters was 681.1 billion won at KB Insurance and 210.6 billion won at KB Life. These figures were down 11.2% and 17.3%, respectively, from a year earlier.
A KB Insurance representative explained, “Insurance profit increased due to improvements in the loss ratio for general insurance and the effects of changes to actuarial policies, among other factors. However, investment profit declined as expanded interest-rate and exchange-rate volatility led to valuation losses on investment assets.”
The representative added, “Excluding the base effect of a one-off reversal of impairment losses on long-term insurance resulting from the refinement of actuarial assumptions in the previous quarter, performance was similar to that of the previous quarter.”
A KB Life representative pointed to “sluggish insurance sales due to the contraction of the annuity market, as well as valuation losses on bonds and alternative investments amid increased market volatility.”
Looking at cumulative new-business contractual service margin (CSM) for the first three quarters of this year, KB Insurance recorded 1.1882 trillion won, down 5.0% from 1.2507 trillion won in the same period last year. Total CSM, meanwhile, rose 16.0%, from 9.3939 trillion won to 10.8974 trillion won.
At KB Life, the corresponding figures increased 15.1%, from 383.2 billion won to 441.2 billion won, and 15.8%, from 3.195 trillion won to 3.6994 trillion won, respectively.
[email protected] Kim Tae-il Reporter