Overseas ventures of South Korean insurers post mixed results in FY’23

Insurers have operated 41 overseas businesses in 11 countries as of yearend.

South Korea’s net income for domestic insurance companies' overseas ventures ended in the negative, declining by $138.4m to reach -$15.9m, in fiscal year 2023 (FY’23).

Conversely, net income for life insurers surged by $27.9m or 86.1% to $60.3m, while non-life insurers faced setbacks due to natural catastrophes, resulting in a decrease of $166.3m to minus $76.2m, data from the Financial Supervisory Service (FSS) showed.

As of year-end 2023, a total of 11 countries hosted 41 overseas businesses operated by four life insurance and seven non-life insurance companies. 

The insurance sector overall experienced a net income decline of $138.8m, totalling minus $27.0m in 2023, primarily attributed to significant losses caused by a wildfire on Maui Island. 

However, the financial investment sector saw a modest increase in net income by $0.4m, reaching $11.1m, driven by improved performance in real estate rental and leasing.

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Regionally, Asia operations reported a yearly net income increase of $24.8m to $129.9m in 2023, whilst European operations saw a net income of $4.1m, up by $7.2m from the previous year. 

Conversely, losses in the US expanded by $170.4m, resulting in a net loss of $149.9m for 2023.

Aggregate assets of overseas businesses amounted to $6.44 billion at the end of December 2023, marking a 1.7% increase from the previous year. 

However, liabilities contracted by 9.0% to $3.44b due to the implementation of IFRS 17, which measured insurance liabilities at current market value. 

Shareholders' equity rose by 17.6% to $3.00b, driven by the introduction of IFRS 17 and paid-in capital.

The FSS will monitor the financial stability of overseas businesses and support newly established operations as domestic insurance companies continue to expand into global markets.