Another Strong Year

Samsung Fire sees net profit rise 30 pct for fiscal year ending in March to 300 bln won

Samsung Fire and Marine Insurance Co. posted a record 300 billion won in net profit during the 2006 fiscal year ending in March, this year, the company said during its briefing on its operation results held at Korea Exchange conference room Aug. 9.
The company attributed to reductions in losses in insurance business and increases in investment activities for the excellent performance during the preceding year. After tax profit amounted to 341.2 billion won, up 30.2 percent from the preceding year.
The company said the emergency risk provision amounted to 38.4 billion won and revised net profit with the risk provision added showed 16.7 percent increase over the previous year. Net profit per share is up 1,169 won to 8,450 won.
The company said insurance premium collected in the year amounted to 8.242,6 trillion won, up 13.6 percent from the previous year. By products, premium for long-term insurance increased 14.9 percent at 4,454.9 billion won. Auto insurance premium collected amounted to 2,760.4 billion won and general insurance premium 936.2 billion won up 12.3 percent and 11.2 percent respectively from the preceding year.
The aggregate rate which gauges the effectiveness of the insurance business was down 0.4 percent from the previous year at 101.4 percent. The reduction is traced to the decreases in the loss in the auto insurance sector down 1.9 percent from the previous year and tight management overall to boost the company's profit.
The loss in the auto insurance sector rose 1.5 percent from the projected rate 72 percent to 74.8 percent last year, calling for more efforts to put the sector's operation normal levels.
The return on direct investment rose 18.9 percent to 702.7 billion won and the investment profit rate rose 0.3 percent at 4.9 percent.
The ratio of non-performing loans went down to 0.6 percent, the lowest among the financial industry. The company has been paying dividends every year for the past 30 years with its annual operation results showing black. This year, too, the company paid 72.1 billion won in cash dividends, 300 percent to common share and preferred share 301 percent with the face value of 500 won. The company also bought 250 billion won worth of its shares and retired them.
The large jump in net profit enabled the company to boost its ROE to 11 percent, making a lot of room for the company to return its profit to shareholders, a result of the company policies centered on shareholders'financial gains.
As a consequence of the company's sound performance results, the payment margin rate, measuring the financial soundness of an insurance firm will be a little lower than 388.1 percent posted at the end of March, but still the ratio would be tops in the industry, ensuring the company to continue to maintain a high level stability in financial soundness.
During the financial briefing the company said it projects the collection of the insurance premium to reach 9,500 billion won with net profit rising to over 400 billion won, 440 billion won if emergency risk provision is added.
In the area of sales, general insurance premium is projected to amount to 9,500 billion won, up 1.5 percent, long-term insurance 5,160 billion won, up 13.5 percent, auto insurance 2,940 billion won under the company's management plan for this year.
Samsung Fire, in the meantime, won the top position among non-life insurance firms in terms of management based on the evaluation of 33 insurance firms in the country by the Korea Insurance Consumer Federation. The company won the same ranking last year, also. KICF has been holding the event every year since 2003 to help insurance consumers to find insurance firms suitable to their needs when making selections.
The evaluation include various aspects of insurance firms such as the scale, soundness, stability, excellence and profitability and Samsung Fire came on top in four categories.
Samsung Fire also won the top place in the auto insurance sector in the Korea Customer Satisfaction Index conducted by the Korea Productivity Center for 2006. The citation read, "Samsung Fire through risk consultant service has upgraded the existing "Anycar Auto Insurance by offering "Consulting Anycar"insurance product for the first time in the industry in an effort to boost its brand power, the company said. nw

President Hwang Tae-sun of Samsung Fire and Marine Insurance Co.