• Consolidated Net Profit: KRW2.1 trillion, increased by 11.2% year on year.
• CSM Balance: KRW12.9 trillion, increased by KRW7 trillion year to date.
• New Business CSM: KRW3.3 trillion, with a CSM margin of 10.5x.
• Dividend Increase: Raised by 21.6% compared to the previous year.
• Invested Assets: KRW214 trillion, with an investment yield of 3.09%.
• Delinquency Ratio: 0.31% in the fourth quarter.
• Total Assets: KRW312 trillion as of December 2024.
• Total Liabilities: KRW279 trillion, with insurance liabilities at KRW203 trillion.
• Shareholders' Equity: KRW32.7 trillion, decreased by KRW11.6 trillion year on year.
• K-ICS Ratio: Maintained within the 180% level for December 2024.
• Dividend Per Share (DPS): KRW4,500 for 2024, an increase of 21.6% year on year.

• Warning! GuruFocus has detected 6 Warning Signs with XKRX:032830.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Samsung Life Insurance Co Ltd (XKRX:032830) achieved a record consolidated net profit of KRW2.1 trillion in 2024, marking an 11.2% increase year-on-year.
• The company successfully increased its CSM balance by KRW7 trillion year-to-date, reaching KRW12.9 trillion, driven by strong health product sales.
• Samsung Life Insurance Co Ltd (XKRX:032830) raised its dividend by 21.6% compared to the previous year, reflecting its commitment to shareholder returns.
• The company expanded its exclusive distribution channel, adding approximately 5,500 agents, which contributed to securing high-quality new business CSM.
• Despite a challenging macro environment, Samsung Life Insurance Co Ltd (XKRX:032830) maintained a low delinquency ratio of 0.31% and achieved an investment yield of 3.09% through asset diversification.

Negative Points

• The company's CSM margin fell slightly due to falling interest rates and regulatory changes, impacting profitability.
• Samsung Life Insurance Co Ltd (XKRX:032830) faced a KRW300 billion loss from power-type annuity products due to improved life expectancy assumptions.
• The K-ICS ratio is expected to decrease gradually due to lower interest rates and regulatory tightening, posing a challenge to capital soundness.
• Shareholders' equity decreased by KRW11.6 trillion year-on-year, primarily due to a drop in Samsung Electronics' share price and falling interest rates.
• The company incurred KRW500 billion in costs from loss-making contracts, raising concerns about future liabilities and profitability.

Q & A Highlights

Q: Are there plans for the CEO of Samsung Life to participate more actively in earnings calls, similar to global practices? Also, can you address the gap between expected and actual solvency ratios? A: Wan-Sam Lee, Vice President: We will consider having our CEO or another executive participate more actively in future calls. The gap in solvency ratios is due to unexpected regulatory changes and lower interest rates. We are exploring measures to improve our K-ICS ratio, aiming to maintain it at or above the card level over the next 3-5 years.

Q: What is the impact of incorporating Samsung Fire and Marine into Samsung Life, and are there plans to acquire more shares? A: Wan-Sam Lee, Vice President: There will be no impact on capital ratio or earnings from incorporating Samsung Fire and Marine. We have no plans to acquire additional shares at this time.

Q: Could you provide details on the loss-making annuity contracts and the potential for future losses? A: Head of Actuarial Team: We incurred a KRW300 billion loss from power-type annuity products due to improved life expectancy. We expect annual losses of KRW200-300 billion but are focusing on securing high-quality new business CSM to offset this.

Q: What are your plans regarding the use of treasury shares and shareholder returns? A: Wan-Sam Lee, Vice President: We are considering various options for treasury shares, including buybacks. Our goal is to enhance shareholder returns and maintain a payout ratio of 50% in the mid-term.

Q: What is the expected impact of the lower discount rate on your K-ICS ratio, and what level do you aim to maintain? A: Head of RM: We expect the K-ICS ratio to remain in the low to mid-180% range despite the lower discount rate. Our goal is to maintain this level even under extreme stress conditions, ensuring robust shareholder returns.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.