Thanks to simultaneous growth in insurance and investment profits, Samsung Fire & Marine Insurance recorded net profit exceeding 1.8 trillion won through the third quarter of this year. In particular, equity investment gains from Canopius, a UK-based specialty insurer, increased threefold over the past year, establishing overseas operations as a new source of revenue.
According to Samsung Fire & Marine Insurance on the 12th, cumulative net profit attributable to owners of the parent for the third quarter of this year was 1.868 trillion won, up 4.6% from the same period last year. Insurance profit reached 1.5103 trillion won, a 9.8% increase year-on-year. Stable earnings in the long-term insurance segment, a return to profitability in auto insurance, and improved profitability in general insurance supported the results.
Long-term insurance profit was 1.2309 trillion won, up 1.1% from the same period last year. General insurance profit rose 35.9% year-on-year to 213 billion won. Expanded domestic and overseas insurance revenues and stabilized loss ratios contributed to this. Auto insurance profit also turned positive, shifting from a 34 billion won deficit in the same period last year to a 39 billion won surplus this year.
Investment profit also improved. Cumulative investment profit for the third quarter was 1.043 trillion won, up 6.7% from the same period last year. Investment income generated from managed assets increased by 3.9% to 2.404 trillion won. It is interpreted that improved holding ratios and high-yield asset investment strategies yielded results despite stock market volatility.
Notably, equity investment gains from Canopius increased significantly. Cumulative equity method investment profit from Canopius for the third quarter of this year was 242.4 billion won, surging 200.9% from 80.6 billion won in the same period last year. This means Canopius's improved performance contributed to expanding Samsung Fire & Marine Insurance's investment income.
However, standalone Q3 results were somewhat sluggish. Q3 insurance profit was 396 billion won, up 6.9% from the same period last year, but investment profit decreased by 23.1% to 255 billion won. Consequently, net profit attributable to owners of the parent for Q3 fell 8.3% year-on-year to 493 billion won. It also decreased by 33.1% compared to the previous quarter.
Contractual Service Margin (CSM), an indicator of future profitability, maintained its upward trend. As of the end of September, held CSM was 14.835 trillion won, an increase of 667.4 billion won from the end of last year. However, cumulative new contract CSM for Q3 this year was 1.84 trillion won, down 15.9% from the same period last year. New contract CSM for Q3 also decreased by 22.1% to 598 billion won compared to the same period last year, indicating some burden in securing future profits through new contracts.
The solvency ratio (K-ICS), a capital adequacy indicator, rose by 17.9 percentage points to 280.8% as of the end of September, from 262.9% at the end of last year. The basic capital K-ICS ratio also improved from 170.7% to 210.3%, maintaining stable capital capacity.
Based on this, Samsung Fire & Marine Insurance plans to accelerate its expansion into overseas markets. Recently, it signed a contract to acquire the remaining 60% stake in Canopius through a joint investment involving global private equity firm KKR and the Korea Investment Corporation (KIC). Once the transaction is completed, Samsung Fire & Marine Insurance's ownership ratio will increase from the existing 40% to 80.6%.
Canopius recorded pre-tax profit of $553 million last year, growing 68% compared to 2023. Samsung Fire & Marine Insurance expects that after acquiring control of Canopius, the contribution of overseas business profits will expand from the existing 9% to 26% through consolidated performance reflection. It also projected that the company-wide return on equity (ROE) would improve by approximately 1 percentage point (P).
However, the capital burden associated with the Canopius acquisition remains a variable. While Samsung Fire & Marine Insurance anticipates its K-ICS ratio will drop by approximately 25 percentage points after the acquisition, it maintains a policy of keeping it above its medium-to-long-term management target of 220%. The Canopius acquisition transaction is scheduled to be completed in the first half of 2027, subject to approvals from domestic and overseas regulatory authorities.
Koo Young-min, Chief Financial Officer of Samsung Fire & Marine Insurance, stated, "The recent acquisition of Canopius shares is a significant milestone in Samsung Fire's corporate valuation enhancement plan and a strategic decision for realizing long-term shareholder value," adding, "Through a successful partnership with Canopius, we will achieve greater leaps forward."
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