[Edaily Reporter PARK JONG-HWA ] HANWHA LIFE INSURANCE’s cumulative net income for the first three quarters of this year increased by more than 10% compared to last year. Although performance in the investment division deteriorated sharply, the company succeeded in improving its overall results thanks to a significant increase in profits from its core insurance business.

HANWHA LIFE INSURANCE announced on the 12th that its cumulative net income for the first three quarters of this year totaled 866 billion won on a consolidated basis. This represents a 12.6% increase compared to the same period last year (769 billion won). However, on a standalone basis, the company posted a net loss of 217 billion won for the third quarter alone.

By segment, the investment division posted a loss of 107 billion won for the first three quarters. While it generated profits of 242 billion won and 113 billion won in the first and second quarters, respectively, it turned to a loss in the third quarter due to a 462 billion won loss. This was due to increased volatility in the stock market and exchange rates during the third quarter, which led to foreign exchange losses on hybrid capital securities (183.6 billion won) and variable annuity hedging losses (246.7 billion won). Regarding the variable annuity hedging losses, HANWHA LIFE INSURANCE stated, “We expect volatility to decrease as we improve the effectiveness of our hedging strategies.”

On the other hand, HANWHA LIFE INSURANCE significantly expanded profitability in its core insurance business. HANWHA LIFE INSURANCE’s insurance profit, which stood at 139 billion won for the first three quarters of last year, jumped nearly threefold to 385 billion won this year. This performance even surpasses last year’s full-year profit (344 billion won). CSM (Contract Service Margin—unrealized profit calculated by converting future insurance profits into present value), a key indicator of future growth, also increased from 689.2 billion won to 785.9 billion won in the third quarter. This is due to the company’s transformation of its portfolio to focus on highly profitable products, such as medium- and long-term whole life insurance and health insurance. Refining claims payment management and actuarial assumptions to reduce the variance between expected and actual claims payments also contributed to the improved performance.

A HANWHA LIFE INSURANCE official stated, “Although non-recurring factors resulting from fluctuations in financial markets—such as exchange rates and stock prices—were reflected, our core business competitiveness has been further strengthened based on the expansion of CSM from new policies and an increase in underwriting profit.” The official added, “We will continue to enhance corporate value by strengthening the fundamentals of underwriting profit through profitability-focused product portfolio management and the management of the difference between projected and actual claims, while expanding synergies with our domestic and overseas subsidiaries.”