Mirae Asset Life's cumulative net profit for the first three quarters of this year plunged 70% year-on-year. The decline was driven by a swing to an investment loss, attributed in part to losses related to its investment in U.S. space company SpaceX and foreign exchange rate fluctuations, as well as a reduction in insurance profits following changes to actuarial assumptions mandated by financial regulators. However, the Company's Contractual Service Margin (CSM) continued to grow, supported by an expansion of new contracts centered on health insurance.
According to the insurance industry on the 13th, Mirae Asset Life's consolidated net profit for the first three quarters of this year stood at 37.5 billion won, a decrease of 70.1% from the same period last year. In particular, the Company posted a net loss of 33.9 billion won in the third quarter alone, marking a shift into the red.
A decline in investment profits played a major role in the deteriorating performance. Cumulative investment losses for the first three quarters reached 9.2 billion won, reversing from a profit of 46 billion won in the same period last year. Although the Company had earned 85.8 billion won in investment income through the first half, it incurred approximately 95 billion won in investment losses in the third quarter alone. The decline was influenced by valuation losses on alternative investment assets, foreign exchange rate fluctuations, and investment losses related to SpaceX.
Insurance profits also declined. On a standalone basis, cumulative insurance profits for the first three quarters were 54.5 billion won, down 53.8% year-on-year. This result reflected the impact of regulatory changes following the application of the Financial Supervisory Service's actuarial assumption guidelines, which amounted to 70.7 billion won. Excluding this factor, insurance profits rose 6.2% to 125.2 billion won from 117.9 billion won in the same period last year.
The CSM, an indicator of future profitability, maintained its growth trajectory. The CSM held at the end of the third quarter was 2.3205 trillion won, up 12.7% from the end of last year. Cumulative new contract CSM for the first three quarters also increased by 3.7% year-on-year to 411.1 billion won. In particular, new contract CSM for health and accident insurance rose 10.6% to 348.9 billion won. Health and accident insurance accounted for 84.9% of total new contract CSM, an expansion of 5.3 percentage points from the same period last year. Annual Premium Equivalent (APE) for new protection insurance contracts also increased by 23.5% to 293.8 billion won.
The variable insurance segment also grew. Variable insurance reserves at the end of the third quarter reached 14.194 trillion won, up 10.8% year-on-year. Variable insurance fee income increased by 21.0% to 45.7 billion won.
Conversely, capital adequacy indicators deteriorated. The solvency ratio (K-ICS) at the end of the third quarter was estimated at 147.3%, a drop of 29.4 percentage points from the end of last year. Over the same period, the basic capital K-ICS ratio also fell by 19.7 percentage points to 94.6%.
A Mirae Asset Life official stated, "The decline in profits in the third quarter was the result of one-time factors, including foreign exchange rate fluctuations and losses from our investment in SpaceX." The official added, "We will secure a stable profit base by expanding new contracts centered on health insurance, managing loss ratios, and strengthening asset-liability management (ALM)."
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