Life insurers' earnings plunge on economic, financial woes

SEOUL, March 3 (Yonhap) -- Total earnings by life insurers operating in South
Korea tumbled 55.5 percent on-year in the first three quarters of fiscal 2008,
hit by the slumping economy and the financial turmoil, the financial watchdog
said Tuesday.

The combined net profit of 22 local and foreign life insurers in the country came
to 761 billion won (US$478.6 million) in the April-December period, compared with
1.71 trillion won a year earlier, the Financial Supervisory Service said. The
companies close their books on March 31.
"The fall mainly came as asset management conditions deteriorated and demand for
new policies declined," the watchdog said.
Due to the weaker bottom line, their average return on assets (ROA), a measure of
profitability, declined to 0.3 percent in the cited period, compared with 0.8
percent a year earlier.
Meanwhile, 30 domestic and foreign non-life insurers posted a combined net profit
of 1.21 trillion won in the first three quarters, compared with 1.45 trillion won
the previous year, the watchdog said.
Their ROA came in at 2.3 percent in the April-December period, down 0.9
percentage point from a year earlier, it added.
The watchdog predicted that it will be difficult for insurance companies to see a
rapid turnaround in the near future as the local economy is sharply losing steam.
The South Korean economy is widely expected to post negative growth this year,
the first annual contraction since the 1997-98 Asian financial crisis. The
government predicted that the local economy will shrink 2 percent in 2009.
sooyeon@yna.co.kr
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