South Korean insurers managed to add growth in coronavirus-battered year of 2020.

The combined net income of life and non-life insurers came to 5.6 trillion won ($5 billion) for the January-September period this year, up 6.1 percent on year, according to data published by Financial Supervisory Service (FSS) on Tuesday.

Non-life entites earned 2.4 trillion won, up 10.2 percent on year. Their interest income fell by 186.7 billion won compared to a year-ago period due to cut in interest rates. But the losses were offset by improvements in loss ratios for automobile and long-term insurances, which declined by 4.5 and 0.3 percentage points, respectively, on smaller claims on car accidents and medical bills amid Covid-19 crisis.

They still incurred massive loss of 3.2 trillion won from insurance operations, although 542.8 billion won smaller than a year earlier.

Life category’s’ net income grew 3.1 percent on year. They made a turnaround from the first-half period, when their combined net income fell 2.6 percent on year.

The gain owed to brisk savings insurance demand that helped reduced operating loss by 408.3 billion won, noted the FSS. The financial authority saw savings insurance sales went up, especially at banks, as an alternative investment option for private equity fund products amid redemption controversies. Also, they were able to cut guarantee reserve in the third quarter that the first-half on stock market’s recovery.

In January-September, life insurance firms earned 81.5 trillion won from insurance sales, up 4.3 percent on year. Non-life insurance firms’ premium income totaled 70.9 trillion won, up 5.9 percent on year.

Insurance firms’ return on assets (ROA) averaged at 0.59 percent in the third quarter, the same as a year-ago. Return on equity (ROE) was down 0.26 points on year to 5.47 percent. Life insurers’ ROA was 0.45 percent and ROE 4.61 percent. Non-life insurance firms recorded 1 percent in ROA and 7.56 percent in ROE.

Their combined assets stood at 1,291.6 trillion won on Sept 30, up 5.6 percent on year. Equity capital, however, grew 7 percent on year to 141.8 trillion won.

By Cho Jeehyun

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