Life insurance firms in South Korea saw their combined net profit decrease by 21.7% in the first quarter of this year due mainly to growing payments in benefits.
The combined net profit of 24 local life insurance companies stood at KRW1.32 trillion ($1.22 billion) in the January-March period, down by KRW341.6 billion logged in the same period last year, reports Yonhap News Agency citing data by the Financial Supervisory Service (FSS).
The weaker bottom line is attributable to losses of KRW5.67 trillion in overall insurance operations, which grew by 9.98%, or KRW566.4 billion, from the same quarter last year.
"Their income from saving-type products fell by KRW2.7 trillion in the first quarter, while insurance payments surged KRW1.9 trillion," the FSS said in a release.
Combined investment income edged down 1.03% on-year to KRW5.97 trillion, as the rise in interest rates affected their disposition gains of available-for-sale securities, the data show.
The top three life insurers in the first quarter were Samsung Life Insurance, Hanhwa Life Insurance and Kyobo Life Insurance. Together, they accounted for 58.8% of the total market share, followed by eight overseas life insurers that took up a combined share of 23%, according to the FSS.
The return on assets, a key gauge of profitability, edged down by 0.21 percentage point to 0.59% for life insurers, and the return on equity shed 2.38 percentage points to 7.03%, the data show.