Samsung Fire & Marine Reports Double-Digit Improvement in Premiums and Underwriting Loss for First Six Months
5 November 2000
Samsung Fire & Marine Reports Double-Digit Improvement in Premiums and Underwriting Loss for First Six Months
SEOUL, Korea--Nov. 5, 2000--Samsung Fire & Marine (KOSPI: 00810), the leading property and casualty insurance company in Korea, reported its financial results for the first six months ended Sept. 30, 2000.The company reported 2,172 billion won (US$1,948 million) in direct premiums written, an 18% increase from the same period last year. Underwriting losses were reduced by 14.6% to 111 billion won (US$100 million) compared with the first six months last year. Gains in the period were offset by stock market declines that caused net investment income to drop 26.7% to 185 billion won (US$166 million) and net income to drop 51.2% to 73 billion won (US$65 million) compared with 253 billion won and 150 billion won, respectively, for the same period last year.
Management attributed stringent underwriting and claims administration for the decrease in the company's loss ratio to 79.7%, down from 80.7% for the same period last year. Execution of tight operating controls contributed to similar success in the company's expense ratio, which dropped to 24.2% from 25.9% for the first six months last year. Samsung's combined ratio improved to 103.9%, down from 106.6% for the same period last year.
"We are pleased with the results for the first six months, which reflect continued operational excellence and customer confidence," stated Tae-Seon Hwang, senior managing director and chief financial officer. "New car registrations and consumer response to premium auto products drove premiums in the period. Samsung's market share continued to rise to 29.6%, the highest level in the company's history.
"We are also beginning to reap the benefits of a refined asset management strategy that minimizes volatile equity investments in favor of fixed-income instruments. At Sept. 30, our investment assets increased by 1.38% to 6.6 trillion won. Non-performing loans also declined significantly to 45.6 billion won, down 36.6% from 71.9 billion won in the first half last year.
"We anticipate achieving even stronger results as we garner the benefits from our new, state-of-the-art risk management system. The new system, which went live in October, will support new liquidity and sensitivity analyses that were not available previously."
Management noted that the company had exposure to only one company among the group of 52 ailing businesses that were affected by creditor bank actions last week. As of Oct. 31, Samsung Fire & Marine held bonds in Dong-A Construction (guaranteed by the Seoul Guarantee Insurance Company) totaling 7 billion won, compared with a total asset base of 7.4 trillion.
In addition, the company recognized the valuation gain at market value totaling 308 billion won, which is credited to the company's capital adjustment account.
In recent events, Samsung Fire & Marine was selected as the sole Korean insurer to operate in China under a new agreement between the two countries. Samsung anticipates opening branch operations as early as May 2001 in addition to existing liaison offices in Beijing and Shanghai. Korean businesses operating in China currently generate approximately 22.3 billion won (US$20 million) in premiums.
Samsung Fire & Marine is a 3.8 trillion won (US$3.3 billion) (see note) non-life insurance company whose roots date back to 1956. SF&M operates three major business lines in auto premiums, long-term products including annuities, and general business that includes fire, marine, cargo, health care and home protection.
The company is based in Seoul, Korea, and has operations in London, New York, Beijing, Shanghai, Jakarta, Tokyo, Ho Chi Minh City and Hanoi. The company has approximately 4,100 employees worldwide. Additional information about the company can be obtained online at www.samsungfire.com.
Note: US$ as of 3/31/00 currency exchange. All other exchange rates as of 9/30/00.
Note to Editors: Financial tables available upon request.