4. Efficiency Profitability Capital Adequacy

Transcription

1

2 The financial information contained herein has not been completely reviewed by our external auditor. Therefore, no assurance is provided that our financial statements are fully accurate, and thus our final reviewed statements may differ from the figures provided in this presentation. This presentation may include forward-looking statements that reflect prevailing conditions and the views of management as of the date hereof, all of which are subject to change. Forward-looking statements are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over time and in many cases are beyond the control of the Company. No assurance can be given that future events will occur, that the forward-looking statements will be achieved, or that the Company's assumptions are correct. Accordingly, actual results may differ materially from those contemplated by the forward-looking statements.

3 1. 1H 2017 Financial Highlights 2. New Business Results 3. Investment Performance 4. Efficiency Profitability Capital Adequacy

4

5 (KRW billion) VoNB (Value of New Business) APE (Annualized Premium Equivalent) NBM (New Business Margin) % 1,688 1, % 33.3% 39.6% +6.3%p Total Premiums 1 11,062 11, % Net Profit 2 1, % (Excluding one-off gains) % Total Assets 256, , % Invested Assets 207, , % Shareholder s Equity 2 27,530 30, % RBC Ratio 374% 332% -42%p 1. Excludes corporate pension and retirement insurance 2. Excludes non-controlling interests 3. Excludes one-off gains of W821bn from Samsung Card share purchase in 1H

6

7 VoNB up +6.5%, driven by New Business Margin expansion under value-focused sales strategy Value of New Business New Business Margin +6.5% (KRW billion) +6.3%p %p 39.6% 33.3% +0.4%p +1.1%p -58 1H 2016 Change in new business volumn Change in new business margin 1H H 2016 Change in product P/F & mix Change in actuarial assumptions Change in economic assumptions 1H

8 Protection : Despite APE drop from high base of 1H 2016, VoNB grew YoY thanks to NBM expansion Annuity/Savings : VoNB grew due to tax change triggered fire sale and market interest rate hike VoNB by Product APE by Product Protection Annuity Savings Indirect Costs % % (KRW billion) 1 Savings Annuity Protection 1, ,131-10% +13% +54% -33% 1, (KRW billion) 1H H 2017 NBM by Product % H H Indirect Costs: Present value of indirect costs such as donations that can not be allocated by product Protection Annuity Savings 69% 47% 16% 12% 4% 5% 1H H

9 Increasing portion of higher margin Health, CI, and Variable Whole Life NBM expansion driven by growth in rider attachments & long-term payment type premiums Protection APE Breakdown Rider Attachment Rate on Whole Life 1 Whole life Critical Illness Variable Whole Life Health 6% 9% 19% +7.7%p 26% 1H H % 20% +3.6%p +13.9%p 12% 34% 1. Rider First Month Premiums / Total First Month Premiums (excluding premiums from whole life death benefit exceeding 300M) Share of Long-term Payment-type Premiums 2 53% 22% 35% 28% 1H H H H First Month Premiums from protection policies with payment periods of 20 years or more - 9 -

10 Temporary surge in Bancassurance contribution due to spike in Annuity & Savings APE ahead of tax change APE breakdown by Distribution Channel APE by Distribution Channel Exclusive Agent Bancassurance (1H 2017, KRW billion) (1H 2017, KRW billion) GA Protection Annuity Savings Others (23%) 25 (2%) (19%) 1, (56%) 594 (70%) Exclusive Agent 151 (53%) GA 162 Bancassurance

11 Maintaining market dominance in robust growing Corporate Pension market Aim to increase market share by expanding DC/IRP customer base Corporate Pension Reserves Corporate Pension Market Share (KRW trillion) DB DC IRP +8.5% * Source: company disclosures (as of June 2017) June 2016 June 2017 IRP DC DC/IRP Participant Trend (participants, thousands) % June 2016 June

12

13 Maintain stable portfolio centered on interest-earning assets i.e. bonds and loans Invested Assets (Consolidated) Invested Assets (Non-consolidated) Cash & Equivalents % +7.5% (KRW trillion) % Cash & Equivalents % +6.6% (KRW trillion) % Bonds Loans 56.9% 51.4% 78.4% Bonds Loans 62.1% 56.3% 76.5% Beneficiary Certificates Equity Real Estate 27.0% 25.1% 2.4% 2.4% 14.0% 9.5% 4.5% 3.8% Beneficiary Certificates Equity Real Estate 20.2% 18.7% 3.3% 2.4% 12.8% 16.7% 3.2% 2.6% June 2016 June 2017 June 2016 June 2017 * Samsung Card Invested Assets (21tn) = Cash (0.9), Loans(19.1), Equity(0.5), Properties (0.7)

14 Maintain stable investment yield YoY, thanks to increased dividend income and disposal gains Investment Income Dividend Income Investment Yield (KRW billion) +62.9% (KRW billion) 3.5% 3.5% +6.7% H H 2017 * Based on non-consolidated financial statements 3,224 3,440 Disposal Gains % (KRW billion) H H 2017 * Based on non-consolidated financial statements 1H H 2017 * Based on non-consolidated financial statements 1. Realized gains and losses on financial assets, disposal of properties, derivatives, and currency transactions

15 Continue investment focus on stable interest-bearing assets under ALM principle Bond Portfolio Loan Portfolio Government & Public bonds (27.1%) 41.0 (KRW trillion) Government agency bonds (20.3%) Residential Mortgage 1 (6.1%) (KRW trillion) Household Credit (0.7%) (56.3%) 40.8 (20.2%) Foreign Currency Bonds(5.1%) KP (33%) Overseas Bonds (67%) Corporate Bonds (3.9%) A (7%) AA (54%) AAA (39%) Policy (7.3%) Corporate(6.0%) Others(12%) SOC (20%) Commercial Mortgage (52%) Project Financing (17%) * Parentheses denote share of total investment portfolio * Based on non-consolidated financial statements 1. LTV for residential mortgage loans is 54% * Based on non-consolidated financial statements

16 New Interest-earning Asset Investments New Investment Yield at highest level since 1Q % 54.0% 55.8% 56.6% Enhanced yield by increasing new investments in loans and foreign currency bonds New Investment Yield New Investment Breakdown (%) (%) New investment yield 10-yr KTB Domestic bonds Foreign currency bonds Loans Q Q Q 3Q 4Q 1Q Q 4Q Q Q 3Q 4Q 1Q Q * Based on non-consolidated financial statements * Based on non-consolidated financial statements

17 Share of floating-rate reserves reached 57.9% Slowdown of negative spread widening, while growth of non-interest investment profit helped counter negative spread burden Reserve Composition Reserve Coverage (KRW trillion) 5.13% 4.52% % 4.13% -62 Average reserve interest rate Yield on interest-earning assets 4.53% 4.51% 4.48% bp 3.84% 3.78% 3.74% Floating -rate reserves 54.0% 55.8% 57.2% 57.9% 2.9% 1 Dec '14 Dec '15 Dec '16 Mar '17 Jun '17 Non-interest Investment Profit 2 (KRW billion) 675 Fixed -rate reserves 46.0% 44.2% 42.8% 42.1% 6.6% Dec '14 Dec '15 Dec '16 Jun '17 1. Average reserve interest rate by type 1H H H Non-interest investment income = Investment Operating Revenues - Interest Income - Investment Operating Expenses

18

19 Expense / Loss / Persistency Rates Expense Rate at last year s level, while Loss Rate stabilized downwards (1Q: 81.8% 2Q: 74.9%) 13M Persistency recovered to 89%, while 25M continues improvement Expense Rate 1 Persistency Rate 4 (%) (%) th month 25th month 6.8 (1H) FY14 FY15 FY16 1H 2017 Loss Rate (%) (1H) FY14 FY15 FY16 1H Expense rate = maintenance expense / adjusted total premiums (ATP)* 4. Based on premiums * ATP excludes corp. pension & retirement insurance and reflects 1/10 of single premiums 2. Loss Rate = (net amount at risk* + waiver of premium + reinsurance expense) / risk premium FY14 FY15 FY16 1Q Q 2017 * net amount at risk = claims paid reserve at time of payment 3. Excluding 160bn of one-off claims from suicide related accidental death benefit (82.1% when included)

20 Net Profit excluding one-off gains is up +26.4% YoY Insurance Profit is up +3.6% YoY due to growth in underwriting margin from improved Loss Rate Net Profit Insurance Profit 2 1,570 (KRW billion) (KRW billion) +3.6% One-off gains from Samsung Card and Samsung Securities share purchase % H H One-off gain from additional purchase of Samsung Card shares (bn) = Gain on bargain purchase (1,844) Realized loss on equity method securities (910) Income tax expense (113) * Excludes non-controlling interests 2. Pre-tax 1H H

21 Shareholder s Equity is up +9.6% thanks to growth in net profit and valuation gains on AFS securities June RBC Ratio is 322%, up +30%p vs end due to increase in Available Capital Shareholder s Equity RBC Ratio (KRW trillion) 332% % % Available Capital 313% Required Capital(100%) (KRW trillion) Dec 2016 Net Profit Other Comprehensive income Dividend June 2017 Dec 2016 Mar 2017 Jun 2017 * Excludes non-controlling interests

22