Good morning, I am Kim Jae-hong, Head of the IR team. Thank you for joining the company's third quarter 2023 earnings conference call. We will begin with the presentation on business and earnings highlights by our CFO and EVP Kim Jun Ha, after which we will have the Q&A session, with answers provided by the Management team. The entire session, including the Q&A, will last a total of one hour. Now, with that, I will hand it over to our CFO, Kim Jun Ha, for the earnings briefing. Good morning, I am Jun Ha Kim, CFO of Samsung Fire & Marine Insurance. I will present on the third quarter 2023 earnings results. Third quarter 2023 net profit attributable to majority interest was KRW 428.2 billion, up 26% versus previous year's KRW 339.8 billion.
On a cumulative basis, net profits reported KRW 1,643.3 billion, which is a 27% year-over-year increase from KRW 1,293.7 billion won. Next is on business breakdown. First, for the long-term insurance. Insurance profit for Q3 reported KRW 438.9 billion won, up 24.1% year-over-year. Cumulative profit was KRW 1,300.4 billion, which is up 27.4% year-over-year. Total CSM volume as of end of the third quarter was KRW 13,259.3 billion, expanding KRW 604.5 billion won versus end of last quarter, and KRW 1,058 billion won YTD.
Through the rollout of new products into our target markets and strategic approach to market with portfolio improvement at its core, protection new business recorded monthly average premium of KRW 17.4 billion in Q3, up 22.5% year-over-year, and CSM multiple was 22.3x, which is an improvement of 9.2x versus last year. As a result, new business CSM for Q3 was KRW 1,164.2 billion, with cumulative basis new business CSM at KRW 2,606.8 billion. Despite the rise in level of social activity and use of medical services following the start of the pandemic, experience variance in the third quarter was KRW 72.6 billion, sustaining a steady trajectory, with cumulative figure coming in at KRW 225.6 billion.
During Q4, we will continue on building portfolios with quality policies, rigorously managing seasonal effects of claim loss and excess medical treatment, while endeavoring to enhance persistency ratio and other efficiency metrics, so as to solidify the basis for steady future earnings. Next is on the auto insurance. Auto insurance revenue was KRW 1,418 billion in Q3, a 0.2% marginal year-over-year increase due to a turnaround in profit and its deepening market competition. Cumulative revenue was KRW 4,199.1 billion, flat year-over-year.
...손해율은, 연휴기간 교통량 증가 등 영향으로 3분기 81.7%를 기록하며 상반기 대비 상승하였으나, 자연재해 사전대비 활동 및 손해관리 강화를 통해 전년 동기 대비 1.6 퍼센트 포인트 감축하였습니다.
Driven by higher traffic during the holiday season, loss ratio for Q3 was 81.7%, a rise from the first half level, but we saw 1.6% decline year-over-year on the back of stronger measures against natural disasters and stronger claims management.
이에 따라 삼분기 보험 손익 KRW 490억을 실현하였고, 누적 기준 보험 손익 또한 KRW 2,438억으로 전년 대비 0.7% 증가한 안정적 수준을 이어가고 있습니다.
All in all, Q3 insurance profit came in at KRW 41.9 billion, with cumulative figure at KRW 243.8 billion, recording an increase of 5.7% year-over-year, sustaining a steady trend.
회사는 사분기 계절적 변동성에 대비하여 손해 관리에 집중함으로써 자동차 보험을 흑자 사업으로 안착시키고, 재료 개선과 보상률 제고를 위한 노력을 지속하는 한편, 내년 초 플랫폼 보험 상품 비교 추천 서비스 도입에 대한 전략적 대응도 차질 없이 준비할 것입니다.
During Q4, we plan to focus on claims management in light of seasonal volatility, so as to solidify auto insurance as a profit making business, while we continue to pay efforts behind improving the system and claims efficiency. As such, we will make thorough strategic preparations to deal with the rollout of recommendation and comparison service for insurance products by the platforms slated for early next year.
다음은 일반 보험입니다. 일반 보험 손익은 3분기 KRW 527억을 기록하며, 누적 KRW 1,948억으로 전년 대비 28.1% 성장하였습니다.
Next, for the P&C insurance, third quarter profit came in at KRW 52.7 billion, reaching KRW 194.8 billion on cumulative basis, while increasing 28.2% year-over-year.
보험 수익은 특종 보험과 해상 보험 확대 및 해외 사업 성장을 통해 누적 KRW 1,970억을 달성하여 전년 대비 9% 확대하였고, 손해율 또한 수익성 중심의 언더라이팅 정책 전개 및 고액 사고 감소로 누적 57.6%를 기록하여, 전년 대비 3.1퍼센트 포인트 개선하는 차별화된 성과를 실현하였습니다.
Insurance revenue, driven by specialty and marine insurance and overseas business growth, reached, on a cumulative basis, KRW 1,097 billion, expanding 9% year-over-year. Thanks to margin focused underwriting policy and decline in high risk accidents, loss ratio came in at 57.6% on a cumulative basis, which is a noteworthy improvement of 3.1 percentage points.
사분기는 자연재해 발생 등 손익 변동성에 대비하여 사전 점검 및 사후 손해 관리를 철저히 하고, 수익성 관리와 매출 포트폴리오 다변화를 지속 추진함으로써 매출과 손익의 안정적 성장을 실현해 나갈 것입니다.
In Q4, we will thoroughly prepare against natural disasters and profit volatility while conducting ex-ante checks and ex-post loss management, and continue to pursue profitability management and diversification of our revenue portfolio, so as to attain steady uptrend in both revenue and bottom line.
loss of KRW 150 billion, recorded investment profit of KRW 484.4 billion based on third quarter managed assets, up 4.1% from the same period last year.
Next is asset management. Despite the impact from bond trades executed to enhance running yield and KRW 150 billion of losses on sales on an AUM basis, Q3 investment profit reported KRW 484.4 billion, which is up 4.1% year-over-year.
누적 기준으로도 운용 효율 제고 노력과 탄력적 시장 대응을 추진해 온 결과, 투자 이익률 2.95%로 전년 대비 0.58%포인트 제고하였고, 투자이익 KRW 1,693.2억으로 전년 대비 17.4% 확대하였습니다.
On a cumulative basis, driven by investment efficiency enhancements and agile response to market movements, investment yield was 2.95%, up 0.58 percentage points year-over-year, with investment profit reporting KRW 1,693.2 billion, an increase of 17.4% year-over-year.
사분기에도 고물가, 고금리 장기화 및 성장 둔화 우려가 지속되는 가운데, 금융시장과 자산 가격의 변동성 확대 등 대내외적 불확실성이 계속되고 있으나, 금융시장 악화에 대비한 철저한 리스크 관리와 함께 저평가 자산 투자 개발구를 병행하고, 고수익 자산 중심으로 포트폴리오 효율화를 지속 추진하여 미래 이익 기반을 견고히 해 나가겠습니다.
In Q4, concerns over prolonged inflation and high interest rate and slowing of growth, as well as internal, external uncertainties, including widening volatilities of the asset price and the financial markets, are expected to continue. However, through rigorous risk management against possible financial market deterioration and by identifying investment opportunities for undervalued assets and continuous efforts behind making the portfolio more efficient based on higher yielding assets, we will fortify the foundation for future earnings. In the face of heightening global market volatilities and macro headwind of high inflation and low growth, SFMI has responded strategically to changes in regulatory regime and competitive dynamics, driving good business performance in 2023. In Q4 as well, we expect difficult operational backdrop will continue, while there will also be a greater seasonal impact on PNL.
The company, across all of its organizations, will become more agile in responding to market changes to close financial year 2023 as the best business year, and at the same time, fully prepare for a myriad of changes in the business environment expected in 2024, so that we may drive growth powered by fundamentals and expand steady stream of earnings underpinned by efficiency innovation. Thank you.
Next, we will begin with the Q&A. I ask that you ask no more than two questions per person.
Now, Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. The first question will be presented by Hong Se-jin from Hyundai Motor Securities. Please go ahead with your question.
안녕하세요, 질문 기회 주셔서 감사합니다. 일단 첫 번째 질문은, 보험료 조정 관련된 질문이고요. 언론보도에서 나왔지만 자보험료 관련돼서 업데이트 부탁드리고, 또 실손보험료도 지금 연말에 인상이 필요한 걸로 보이는데, 이거에 대한 목표치나 아니면 필요치, 이런 게 세대별로 있으시면 그 부분에 대해서 말씀 주시면 감사하겠고요. 두 번째 질문은 할인율 기준 강화되는 거, 그리고 UFR도 그렇고 LLP도 그렇고 분야별로 K-ICS 예상 영향도 함께 부탁드리겠습니다. 이상입니다.
Thank you for taking my question. My first question relates to the adjustment in the premium levels. As was seen from the press articles, there was a news on the auto insurance premium adjustment. So can you provide us with an update on how the auto insurance premium will look like going forward? And also, it seems there's going to be also another pricing hike for medical indemnities by the end of the year. From the company's perspective, what is your target level, or what do you think is the necessary amount of hike that is required? Second, is with regards to the more stringent criteria and guidelines regarding the discount rate, and what impact that will have on your UFR and LLP, and what is the implications and on your KICS figure? Yeah. I am Lee Sang-y oung.
I will respond to your question as the head of the auto insurance. So recently there's been some press articles on the possible cuts for the auto insurance premium, but at this point, there is no specific decision that has been made. It is true with regards to the overall macroeconomic backdrop, with higher interest rates, et cetera, there has been during the roundtable session with the authorities a request for a further cut in the auto premium rate at an extent that is faster than previous years and at a higher level. However, with regards to the actual cut in the premium, if you look at a specific segment of the auto insurer market in the mid-tier, their loss amount has actually been expanded, so there are multiple factors that would need to be considered.
... 더불어서 동절기는 통상적으로, 사고량이 증가하고 손해율이 좀 큰 폭으로 올라가는 측면이 있고, 아직 내년 보험료와 관련된 정비 수가 협상도 아직 타결이 안 된 상태이기 때문에, 이런 부분들을 좀 종합적으로 고려해서, 당국하고 합리적인 수준의 요율이 조정될 수 있도록, 요청을 하고 있는 상황입니다. 이상입니다.
Also, on top of that, typically, a winter season is where we see elevated level of accidents and also loss ratio driven up, and we have yet to reach an agreement in terms of the repairs unit cost. So the prices and the insurance related inflation is an aspect that needs to be determined at this point in time. So in light of all of these factors, we have made a request to the authorities that we set the premium level at a rational level in light of all these factors.
실손보험료 조정에 대하여 말씀드릴 장기상품개발팀장입니다. 아직 최종 숫자는 나오지 않았기 때문에 구체적 숫자는 제시할 수는 없는데, 없습니다. 실손 일세대는, 손해율이-
I'm the team leader of the Long-Term product development team. Responding to a question about the medical indemnities, we do not yet have a final number that has been determined, but looking at each of the generation of these medical indemnity products.
실손 일세대는, 손해율이 여전히 100%를 초과하는 등 높은 상황이나, 지급 보험금 추세 등을 고려하면 작년 대비 인하 요인이 일부 있으며, 이를 반영해 보험료 조정이 될 수 있도록 하겠습니다.
Regarding the first generation medical indemnities, the loss ratio is still in excess of 100%. Looking at some of the key levers, there is a room for additional cut in the rates in light of the overall claims that is being paid, and we will try to reflect that in the trajectory going forward.
이 삼세대는 인상 요인이 있고, 특히 삼세대는 작년에 최초 요율 인상이 된 만큼, 인상 요인이 상대적으로 더 높습니다.
So for the gen, second and third generation, there are factors that would need to push up the pricing level. And also for the third generation, there is a bigger factor that calls for a higher increase.
이 삼세, 최종 확정되기 전까지는 조정 요인이 있어, 있고, 실적에 기반해서 요율 반영이 될 수 있도록 하겠습니다.
So up until the time we reach a final conclusion on the extent of this adjustment, we will look at each of these factors, and we will make sure that those adjustments are firmly based on the business performance.
who will speak about the liability discount rate.
I am Choi Gukil. I will respond to your question about the discount rate on the liabilities.
말씀하신 대로 금감원은 지난 칠월에 UFR이나, UFR 단계적이나, LLP 연장 등, 부채 할인율 기준에 대해서 가이드라인을 발표한 바 있습니다.
As you know, on July, the authorities have issued a guideline with respect to the discount rates on the liability side, including UFR and also the extension of the LLP period.
당사의 경우에, 부채 할인율 하락 시 가용 자본이 일부 감소하긴 하나 당사는 듀레이션 오버매치 상황으로 금리 리스크, 금리 리스크도 같이 감소하여, 타사의 경우 일부 영향이 있을 것으로 예상하고 있으나, 당사의 경우 영향도는 거의 없다, 이렇게 판단하고 있습니다.
So with the lowering of the liability discount rate, the available capital is going to go down. But in the case of our company, our duration is overmatched at this point, so the interest rate risk is also going to go down quite significantly. So compared to our peers, we think that the impact is going to be quite minimal for us.
이상입니다.
Thank you.
질문 감사합니다. 그럼 다음 질문 받겠습니다.
Thank you for the question. We will move on to the next question.
다음으로 질문해 주실 분은 JP 모건의 김명옥 님입니다. The following question will be presented by Myeongguk Kim from JP Morgan. Please go ahead with your question.
예, 안녕하십니까? 질문해 주셔서 감사드립니다. 두 가지 여쭤보고 싶은데요. 첫 번째는 이제 올해 이익이 굉장히 이제 좀 많이 이제 증가를 해서, 그 올해 이제 만약에 이제 배당을 추정하게 된다고 그러면, 저희가 이제 작년 대비해서 배당금이 최소 이제 두 자리로, 더블 디지스로 이렇게 좀 오를 수 있다고 보는 게 합리적인지, 아니면 그런 예상에 조금 다른 좀 저희가 고려할 내용이 있을지, 그게 궁금합니다. 그리고 두 번째는 이제 장기 보험 관련해서 여쭤보고 싶은데요. 이제 사실은 그 현재 그 월납 대비해서, 제가 이렇게 볼 때는 조금 그 이제 신계약 CSM 규모가 좀 이제 많이 이제 좀 큰 것 같은데, 저희가 이 정도의 이제 신계약 CSM을 앞으로도 계속 그 유지할 수 있다고 좀 보시는지, 아니면 올해가 좀 상대적으로 좀, 좀 규모가 크고, 이제 좀 정상화되는 과정을 앞으로 밟을 걸로 예상하시는지, 그 두 가지 말씀해 주시면 감사드리겠습니다.
Thank you for taking my question. I have two questions I wish to ask. If you look at this year's profit, it has gone up quite significantly. So if we think about the dividend coming from the company on a year-over-year basis, would it be reasonable for us to expect at least a double digit growth in terms of the dividend paid out? Or are there some other factors that we need to be mindful of in the market? Second question is on your long term business. Now, at this point, compared to your monthly average premium, your new business CSM seems to be quite large. Is this sustainable in the future, or is this something that is just particular for this year and you expect to go through some normalization for these numbers? Yeah... On your first question, this is CFO.
I will respond to your first question. So you are correct. In terms of the size of the profit, it has been uptrending, but as you would also appreciate, every fourth quarter, we see more natural disasters and higher, higher risk accidents and also heavy snowfall, for instance. And that was the case Q four of last year as well, where we booked quite significant amount of losses. So we will wait and see how Q four plays out before we make the final decision on the amount of distribution. And also there are some guidelines that have been issued by FSS that will need to be applied at the end of the year when we close our accounts. But once again, the company will do its utmost to make sure that we are able to provide you with a progressive dividend payout. Yes.
Hello, this is Yong-bok. I am the Team Leader of Long-Term Insurance Strategy. Responding to your question, yes, you are correct. We have seen new business CSM continuously go up, and one of the key drivers behind that is a shift in focus onto higher CSM yielding products, including the H term product and Lapse- supported products. So in terms of the overall volume of new business CSM, as was the case in Q3, in the fourth quarter as well, we will continue to provide more segmented products that best fit specific customer targets, which will be a key driver behind continuously expanding the revenue from the new businesses. And we will also, for next year, endeavor to make sure that we drive that volume growth.
On the quality side, which is represented by the CSM multiple, maybe the multiple level may not be as high as what we've seen during the third quarter, but through continuous efforts in improving the portfolio, we will make sure that we are able to leverage that growth of the CSM multiple, at least on par with what we've seen previously for both Q4 and next year. So just to summarize, we will be driving increase and improvement in terms of the volume, the Q aspect, and also at the same time enhance quality as well. Thank you. Next question.
The following question will be presented by Kang Seung-gun from KB Securities. Please go ahead with your question.
Yes, 두 번째로는 저희 아까 그, 실손보험료 언급을 해주시면서, 일세대는 인하 가능성, 이런 것들을 좀 말씀을 해주신 것 같습니다. 예, 저희가 이해하고 있기로는, 현금 흐름의 향후의 보험료 인상도 어느 정도 수준으로 된다라는 것들이, 반영이 되어 있는 걸로 알고 있는데요. 그렇다면 이번에 인상률이 이제 어느 수준으로 결정이 되게 되면 저희의 CSM도 이제 변동이 생길 수 있는 거잖아요, 인상이 된다 하더라도. 그래서 이번에 만약에 일세대 실손보험료 인하가 결정이 된다면, 이거는 저희의 캐시플로우에 녹여 있는 거와 혹시 다른 방향은 아닐지 궁금합니다. 그거에 대한 설명도 좀 부탁드리겠습니다.
Thank you for taking my question. When you were explaining about the dividend plan for the future, you mentioned that there is some additional guideline that would be applied at the end of the Q4. I presume that this has to do with the loss progression coefficient and incorporating the performance pay into the cash flow. Would like to know what impact that will have on the overall CSM line item. And it seems like the adjustments that were made regarding the incurred accidents had a big impact on the experience variance. Would like to know whether, going forward, this could continue to be a factor. Second, when you talk about your medical indemnity products, you talked about the possibility of a rate cut for generation one, and then, you know, rate hikes for other generations.
I understand that the future premium hike is incorporated or is reflected in the cash flow calculations. So would like to know if there is a rate cut for your generation, the first generation product, you know, would that have been reflected in the cash flow? Would like to get that insight as well.
Point you mentioned, the incurred accident liability, there is now a notice of change in supervisory regulations, and regarding this, the impact on our company is not large and is being analyzed in a positive direction.
So once again, this is Yong-bok, the team leader of the long-term insurance strategy. On the guidelines, the incurred claims liability related guidelines have already been pre-notified by the authorities FSS, and for our company, the impact is not going to be significant.
예, 이로 인해서 반영하게 된다면 향후에는 어느 정도 예상치 않은 좀 축소가 될 수 있을 것으로 보고 있습니다.
If we think that that impact is going to have a narrowing effect of the Experience Variance.
그리고 또한 성과급 등 그 다음, 그 외에 가이드라인은 지금 나오지는 않고 있으나, 일부 논의되는 사항이 있어서, 이 부분에 대해서는 사분기 그 다른 조정 요인과 같이 내부적으로 검토하고 있습니다.
Regarding the performance pay aspect, there has not yet been any guideline that was issued, but including with other factors, other adjustment factors, we are closely looking at potential impact that it may have on Q4.
또한, 그 연말 성과급, 사업비 이외에 성과급을 포함한 사업비의 손해율 등에 대한 플러스 마이너스 요인들이 있어서 CSM의 조정은 크지 않을 걸로 보고 있고, 향후에 정확한 내용이 나오면 이에 대해서 말씀드리도록 하겠습니다. 이상입니다.
In any other positive, plus or minus factors on the loss ratio related, excluding the expense at the end of the year, at this point, the CSM Adjustment Factors, we do not think are going to be that big, but once we have those specific numbers, we will communicate that with you.
두 번째 질문은 곧 답변 드리겠습니다. 잠시만 기다려 주십시오.
Just bear with us, one moment.
예, 두 번째 질문에서 말씀드린 장기보험 전략팀장 이용복입니다. 예, 실손 같은 경우는 이제 지금 아까 말씀드린 일세대에서는 약간의 인하 요인, 이삼세대는 플러스 요인이 지금 실적상으로 나오고 있습니다.
Once again, this is Yong -bok, responding to the second part of your question. For the medical indemnity products, for the first generation products, there is a factor for a cut. For second and third generation, a increase in pricing.
이 부분에 대해서는 지금 실적과 가정을, 실적을 기준으로, 예, 가정을 또 선정하고 있고, 이 부분은 지금 내부적으로 검토 중이며, 향후에 이 부분이 분석되는 대로, 예, 상세히 말씀드리도록 하겠습니다만, 큰 영향은 없을 것으로 보고 있습니다.
Once again, that statement is based off of the historical figure that we are seeing. So it is based upon the actual historical that we calculate the assumption. Right now, we're in the process of reviewing those different aspects, and once we have that confirmed number, we will provide you with the detail. But even at that, we do not feel that there would be a big impact.
... 질문 감사합니다. 그럼 다음 질문 받겠습니다.
Next question. 다음으로 질문해 주실 분은 대신증권의 박혜진 님입니다. The following question will be presented by Hyejin Park from Daishin Securities. Please go ahead and your question.
네, 안녕하세요. 대신증권 박혜진입니다. 저는 이번에 CSM 조정, 그 마이너스 폭 확대된 거 이유에 대해서 지금 가정 변경이 어떻게 적용됐는지 설명을 좀 부탁을 드리고요. 그리고 내년에도 저희가 이 조정 폭을 이 정도 감안을 해야 되는지 전망 부탁드립니다. 두 번째는 채권 교체 관련인데, 어쨌든 지금 고금리 상황이 계속되고 있고, 이런 상황에서 저희가 이거는 언제까지 진행하실 예정인지, 계획 있으시면 공유 부탁드리겠습니다.
Thank you. I'm from Daishin Securities, Park Hye-jin , asking you two questions. First one is a question on your CSM adjustment. How was the assumption changed? Because we see that the negative extent has actually widened. And should we, going forward for next year, also assume this level of CSM adjustment? Second question is on your bond trade. As the backdrop is in high interest rate environment, up until when would you carry on with this approach in terms of the bond trade practices that we are seeing?
The CSM adjustment in the third quarter expanded from the previous quarter due to the impact of applying the Silson guidelines.
Once again, this is VP of Long-Term Insurance Strategy and Lee Yong-bok, responding to the higher level of CSM adjustments that we saw during the third quarter is because of the adjustments regarding the medical indemnity guidelines by the FSS.
예, 저희 회사는 그 실손 가이드라인을 전진 반영했기 때문에 금번 삼 분기에 KRW 1,430억의 실손 CSM 조정이 반영되었습니다.
Now, at SFMI, we used a forward-looking approach in applying this medical indemnity guideline, and that had a CSM adjustment impact amounting to KRW 143 billion.
이를 제외시 CSM 조정은 KRW 1,250억으로 전분기 대비도 약 KRW 450억가량 낮춰진 금액이라고 보시면 되겠습니다.
But if you were to take this impact out, then the CSM adjustment will amount to KRW 125.5 billion, which on a Q-on-Q basis is a decline of KRW 45 billion.
일회성 비용은, 일회성인 실손 가이드라인을 제외시 보시는 바와 같이 감소된 것처럼, 향후에도 효율 개선과 재원 확대 등을 통해서 시스템 조정을 지속적으로 축소할 계획이라고 말씀드릴 수 있습니다.
Looking at a basis where you actually exclude the one-off factor of the guideline impact by the FSS, there was actually a decline in the extent of CSM adjustment. We will continuously bring improvements in terms of efficiency and also expand the resources available for use so that we can continuously narrow that CSM adjustment.
예, 안녕하십니까? 두 번째 질문 채권 교체 매매 관련 질문에 답변드릴 재무팀장 최원재 성명입니다.
Hello. I will respond to your question about our trade, in terms of the fixed income instruments. I'm VP of Finance Planning, Choi Won -jae.
아까 올해 3분기 실적 설명회에서 CFO께서 말씀하셨지만, 올해 그 3분기에 채권 매각 손실, 채권 처분 손실 KRW 150 billion이 발생하였고, 이는 저희가 3분기에 1분기, 2분기 대비해서 금리가 좀 상승했던 3분기 시장 상황을 고려해서 과거에 저금리 때 매입하였던 채권들을 매도하고, 지금 더 높은 금리를 조금 더 장기로 향유할 수 있도록 보다 소폭 긴 채권으로 교체 매매를 실시한 것에 따른 것입니다.
So during the third quarter, as was mentioned by our CFO at the opening presentation, in Q3, because the interest rate level was more higher compared to what we've seen in Q1 and Q2, we had done a bond trade, which generated a loss on disposition of the fixed income instruments amounting to KRW 150 billion. The bonds that we had previously purchased, when the interest rate was relatively lower, what we did was we sold off that position and we traded into a higher yielding bond instrument, and that basically was the trade or the bond trade that we executed.
그 향후에 이제 얼마나 이런 이제 채권 교체 매매를 더 할지 여부는 이제 가장 중요하게는 시장 상황에 많이 달려 있고요. 저희가 이제 그때, 그때 시장 상황을 봐서 감안을 해서 결정을 하고 있고, 또 시장 상황 못지않게 또 저희가 또 보험회사로서 또 회사의 또 전체적인 손익 상황도 고려를 해서 유동적으로 기존 출시 여부를 검토할 예정입니다. 이상입니다.
Your question relating to up until when would we engage in such a type of a bond trade? It would, of course, depend on the overall market environment, which we'll consider fully in making those decisions. But at the same time, as an insurance company, we would also look at the PNL of the company and also take on a very nimble approach in how we respond with this trade.
질문 감사합니다. 그럼 다음 질문 받겠습니다.
Thank you. Next question. 다음으로 질문해 주실 분은 DB금융투자의 이병권 님입니다.
The following question will be presented by Lee Byung-gun from DB Financial Investment. Please go ahead in your question.
Uh, yeah.
Thank you for the opportunity to give me the opportunity to ask question. I have two. First one has to do with the overall trend in your new business, new business, CSM or size across the months of July, August, September and October. I ask this question because it seems like the third quarter, sales for protection insurance was heavily impacted by what the life insurers did. They, their decision to actually stop the sales of the short-term premium, payment product, and that had an impact on P&C insurers sales policy, is what I understand. So would like to know as to what the new business sales trend was like for July up to September, and had there been any significant changes in the overall portfolio, and what was the trend like in the month of October?
Second question is on the guideline impact. You mentioned that you applied forward-looking approach and there was KRW 143 billion of CSM adjustment. I would think that for each of the generation of the indemnity products, that there would have been a bottom line impact as well, and that impact would have been different across different generations, generation one through to one to three. So you must have the CSM impact. So if possible, can the company share with us what that CSM is per each of the generation of products?
Yes, this is Lee Yong-bok, VP of Long-Term Insurance Strategy. Responding to the first question on the new business trends, I understand that for the life insurance company, there are short-term pay, whole life products, where the sales of such products were heavily concentrated from May to July. But for the non-life insurance, it was a different types of products that we sell, a high level of sales. For instance, children's insurance with the application of the age limit guideline, as well as with the changes in the coverage for the nursing and care insurances. We've seen concentrated sales across the month of July and August. So I understand that these were different patterns because it's life and non-life.
So just to sum up, from month of July up to September, we saw higher sales of health insurance, disease cover, and children's coverage products, which are higher CSM yielding products, which drove up the new business CSM. And also in October, with the lifting of that age limit on the children's insurance, the effect actually ended in September. So after that effect has dissipated, the sales did dip. However, the overall portfolio is comprised with a very strong focus on the disease and the health and children's insurance, as well as the 90- age term products, which really keep our portfolio quite robust. Yes. The second question on the application of the medical indemnity guidelines and its effect for each of the generation of products.
What, yes, you're right, we approached the forward-looking approach, and there was a CSM impact of KRW 143 billion. In terms of the comparison for different generations, first and second generation is in the form of a treaty. It's a rider product, whereas for the third generation, it is a standalone product. So it's quite difficult to provide you with an apples to apples comparison. On the bottom line impact, with the lowering of CSM by KRW 143 billion, there's an impact of CSM amortization, as well as loss expense, which on a quarterly basis was about KRW 10 billion, but this is a one-off factor. Thank you.
Next question, please.
The following question will be presented by Seol Yong-jin from SK Securities. Please go ahead with your question.
Thank you for taking my question. I think the company is doing a good, great job of maintaining your quality, especially, if we look at the CSM multiple, but I see that there's been a bit of a dip on your 60-month persistency ratio. Can you explain as to the reason why? I am Yong-bok, VP of Long-Term Insurance Strategy. On the 61-month persistency ratio, these were the policies that were sold prior to 2017, when there was heightened market competition. So compared to our peers, our persistency ratio is a bit lower. So we are continuously focusing on efficiency management of these value-enforced policies, and if you were to turn your attention to the 37th-month persistency ratio, it is on an improving trend on a YOY basis. I would also provide some more elaboration on that.
I am VP of Corp Management Support, Lee Johan. So the 61-month persistency ratio, basically, these are policies with elapsed period of above 5 years. Under the previous regulatory regime of IFRS 4, on a BEP basis, it would have been a persistency ratio within 2-year frame. And then on, based under the IFRS 17, starting last year up to this year, we know very clearly there is a significant difference with the past approach, and that those are some of the aspects that are being reflected in our CSM multiple. As VP Lee Yong-bok has mentioned, you know, we have different metrics, like the new business CSM and the total CSM volume. And there was a previous question about how, you know, how, whether we see that we will be able to sustain this new business CSM. What comprises new business CSM?
Of course, there is volume, the total volume aspect, but also a quality aspect as well, which is all about improving the efficiency. That improvement in efficiency has a bigger impact on the CSM. So from the company's perspective, we will very rigorously manage against that approach so that we may bring about improvement going forward.
Thank you. That brings us to the end of the Q&A session. If you have unanswered questions, please feel free to contact us at the IR Team. Thank you very much.
This brings us to the close of the earnings presentation of SFMI for 2023. Thank you.