This article first appeared on GuruFocus .
Release Date: August 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record-high new business CSM of KRW327.4 billion in Q2, up 25% YoY, driven by profitable protection sales and rate adjustments.
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Net income surged 45.6% YoY to KRW116.4 billion in Q2, with H1 2026 cumulative net income reaching KRW215.3 billion.
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CSM balance expanded to KRW4.42 trillion, supported by stable experience adjustments and a steady CSM amortization rate around 10%.
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Long-term insurance profit increased by KRW20 billion YoY to KRW113.8 billion, aided by higher CSM amortization and improved experience variance.
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Indemnity loss ratio improved significantly, dropping 7.8 percentage points to 116.5%, and overall loss ratio stabilized at 98.8%.
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Auto insurance new sales grew 33% YoY to KRW108.5 billion post-Carrot merger, with a strong renewal rate of 84.2%.
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K-ICS ratio remained stable at 185% pre-transitional measures, reflecting solid solvency and risk management.
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S&P upgraded the company to A+ rating, supporting global expansion and high-quality insurance sales.
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Full-year 2026 outlook is positive, with expectations of insurance revenue exceeding KRW6 trillion, CSM balance reaching KRW4.6 trillion, and net income surpassing KRW380 billion.
Negative Points
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Auto insurance recorded an insurance profit deficit of KRW17.2 billion in Q2 due to higher claim costs from inflation and increased repair costs.
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P&C insurance profit decreased by KRW1 billion to KRW5.3 billion, impacted by large property claims.
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Invested assets declined by approximately KRW1 trillion from the end of last year, driven by a drop in bond valuations amid rising market interest rates.
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Financial market volatility remains high, posing risks to investment yields and asset valuations.
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The company faces ongoing challenges in managing loss ratios in commercial lines due to rate competition and increasing loss severity.
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Persistency rates, while improving, remain at moderate levels (e.g., 13th month at 87.1%), indicating potential lapse risks.
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The company relies heavily on the GA channel (62.5% of protection new business), which may pose concentration risk.
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Regulatory changes, such as the sales commission deferral system, could impact sales strategies and require adaptation.
Q & A Highlights
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Q: What drove the record-high new business CSM and overall profitability in Q2 2026? A: CFO Hwang Dong-Won reported that Q2 new business CSM reached KRW327.4 billion, a 25% YoY increase, driven by stable profitability-focused protection sales following the April rate adjustments. This led to a record-high performance for five consecutive quarters, expanding the total CSM balance to KRW4.4 trillion. Consequently, Q2 net income surged 45.6% YoY to KRW116.4 billion, bringing H1 2026 cumulative net income to KRW215.3 billion.
Q: What is the company's official outlook for the full year 2026? A: The CFO provided a clear 2026 guidance, expecting annual insurance revenue to exceed KRW6 trillion, the CSM balance to reach KRW4.6 trillion by year-end, and annual net income to surpass KRW380 billion. This growth is expected to be driven by securing high-quality contracts across all business lines, targeting niche markets amid regulatory changes like the sales commission deferral system, and tactical asset management.
Q: How is the company addressing the challenges in the auto insurance segment? A: While auto insurance revenue grew to KRW286.7 billion in Q2, the segment recorded an insurance loss of KRW17.2 billion due to increased claim severity from inflation and higher repair costs. The company is responding by securing rate adequacy, particularly for commercial auto and property damage coverage, and accelerating business expense efficiency. Post-merger with Carrot Insurance, new sales increased 33% YoY to KRW108.5 billion with a strong renewal rate of 84.2%.
Q: Can you elaborate on the long-term insurance segment's performance and loss ratio improvements? A: Long-term insurance profit increased by KRW20 billion YoY to KRW113.8 billion, supported by higher CSM amortization and improved experience variance. The indemnity loss ratio dropped significantly by 7.8 percentage points to 116.5% due to rate adjustments and enhanced claims management. The overall long-term loss ratio stabilized at 98.8%, down 5.8 percentage points QoQ, while persistency rates improved across all cycles (13th month: 87.1%, 25th month: 72.5%, 37th month: 59%).
Q: What is the current capital adequacy and solvency position? A: As of the end of June, the K-ICS ratio before transitional measures is expected to be 185%, maintaining a stable solvency capability. The company is managing long-term insurance risk by increasing the share of term maturity and renewal riders, utilizing reinsurance, and investing in interest-bearing assets. The K-ICS asset liability sensitivity gap was 0.67 with a matching ratio of 106.5% as of the end of March.
Q: How did the investment portfolio perform amidst market volatility? A: Despite high volatility in financial markets, Q2 investment profit reported KRW145.2 billion, driven by stable interest and dividend income and high-quality equity investments. The investment yield for Q2 was 3.77%, with a book yield on interest-bearing assets at 3.21% and a new investment yield of 3.9%. Invested assets stood at KRW17.9 trillion, down approximately KRW1 trillion due to falling bond valuations amid rising interest rates, but the company maintains a stable ALM strategy centered on long-term bonds.
Q: What is the strategy for the P&C (Property & Casualty) insurance segment? A: P&C insurance revenue grew to KRW241.6 billion in Q2, but insurance profit decreased by KRW1 billion to KRW5.3 billion due to large property claims. The company is diversifying its portfolio around specialty, marine, and prime commercial risk of major conglomerates. To combat rate competition and increasing loss severity, they are enhancing underwriting and improving reinsurance structures, while also expanding participation in overseas inward reinsurance to diversify income sources.
Q: What are the key drivers behind the CSM balance growth and its future trajectory? A: The CSM balance increased by KRW140.3 billion QoQ to KRW4.42 trillion, driven by new CSM growth and stable experience adjustments. The company is maintaining a CSM amortization rate around 10%, which is steadily increasing amortization profit. With the current momentum in protection sales and a value multiple of 14.1 times, the company expects the CSM balance to reach KRW4.6 trillion by the end of 2026.
Q: How is the company managing its sales channels and product mix? A: For protection new business, the Tied agency channel accounted for 31.4% and the GA channel for 62.5% of sales. The company is focusing on highly profitable products, with comprehensive SI and women's insurances making up 82% of total health and protection sales. They plan to build a sustainable channel ecosystem for growth, particularly in light of regulatory changes such as the sales commission deferral system.
Q: What recent credit rating actions have been taken, and how does this impact the strategy? A: The company received an A+ rating from S&P in May 2026. Based on this improved credit profile, the CFO stated plans to continuously expand global sales with a focus on high-quality insurance, leveraging the stronger rating to support growth initiatives in international markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
