Good morning and good evening. Thank you all for joining the conference call for the Samsung Fire & Marine Insurance earnings results. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star and one on your phone during the Q&A. Now we will begin the presentation on Samsung Fire & Marine Insurance's first quarter of fiscal year 2026 earnings results.
[Non-English content]
Good morning. I am Helen Park, Head of IR at Samsung Fire & Marine Insurance. I'd like to thank you all for taking the time to participate in today's 2026 first quarter earnings results presentation.
[Non-English content]
Today's session will begin with an overview of the fiscal year 2026 first quarter business performance, followed by a Q&A session. The session is expected to last approximately one hour. I will now turn it over to the CFO for the presentation.
[Non-English content]
Good morning. I am CFO Koo Young-min. Let me start the briefing on the first quarter 2026 earnings results of Samsung Fire & Marine Insurance.
[Non-English content]
In the first quarter, we saw profit-centered growth strategy, which we pushed for proactively across all business lines, starting to translate into earnings, driving an outperformance against the company's target.
[Non-English content]
Insurance profit showed improvement year-over-year, increasing 5% and reporting KRW 551.3 billion, while investment profits sustained steep uptrend, expanding 24.4% year-over-year, reaching KRW 362.4 billion.
[Non-English content]
Q1 consolidated pre-tax profit came in at KRW 857.7 billion, with net profit attributable to majority interest recording KRW 634.7 billion, which is up 4.4% year-over-year, displaying a standout performance in the industry.
[Non-English content]
Now moving on to key results by business line. For the long-term insurance underpinned by strategic shift made from the second half of last year towards strengthening the bottom line, we focused on fundamentals across product underwriting and channel operations. As a result, monthly new business for protection line reported KRW 14.8 billion, down 24.9% year-over-year, while CSM multiple improved 2.3 x year-over-year, reporting 14.2 x. CSM volume also expanded KRW 301.5 billion year-to-date, reporting KRW 14,469.2 billion.
[Non-English content]
Insurance profit recorded KRW 440 billion of 4.9% year-on-year on solid CSM amortization and improved claims variance. In terms of efficiency metrics, risk loss ratio, which showed deteriorating trends last year, fell 1 percentage point Q on Q, shifting the trends towards improvement, while 25th month and 37th month persistency ratios increased 7.1 percentage point and 5 percentage point year-on-year, displaying a sizable uptrend.
[Non-English content]
In Q1, while maintaining our stance towards gaining fundamental resilience and with a focus on profitability despite intensifying competition, long-term insurance lines saw meaningful improvement in efficiency as shown through the persistency ratio. We achieved distinctive result in the industry, i.e., stable profit and higher CSM quality.
[Non-English content]
Moving into the second quarter, rather than growing the volume, we will continue to pivot on profit driven management, fundamental improvement in resilience and gaining future value. At the same time, we'll expand high quality new business and improve efficiency indicators to drive stable CSM, quality centric growth and to fortify our core competitiveness. Underpinned by these efforts, we will achieve gradual improvement in insurance profits and sustain this distinctive performance trend.
[Non-English content]
Next is auto insurance. Based on our firm stance taken towards profitability, instead of boosting revenue, we focused on enhancing the quality of portfolio around high quality policies, which drove auto insurance revenue of KRW 1,363.6 billion, marginally down 1% year-on-year.
[Non-English content]
Despite some impact from premium hike in February due to built up effect of rate cuts over the past four years and heavy snowfall at the start of the year, loss per claim went up. Amid prolonged cycle of worsening loss ratio, we focused on securing steady profit stream underpinned by reasonable cost base and on enhancing the quality of the portfolio, and thus was able to defend our Q1 insurance loss at KRW 90.6 billion. Through continuous portfolio enhancements and premium hikes, earned premium per coverage also made a Q over Q turnaround.
[Non-English content]
In Q2, through differentiated upselling strategies, building product operational framework, and strengthening execution capabilities on site, and through expense optimization, we will endeavor to build a profit-generating business structure that can withstand the market pressures.
[Non-English content]
Next is on P&C business. Underpinned by concurrent revenue growth from domestic and global business, insurance revenue was KRW 449.1 billion, up 9.6% year-over-year. With more granular rate scheme for low margin sectors applied and decline in large loss events, loss ratio reported 53.6%, which is a sizable improvement of 9.9 percentage points year-over-year. Thus, insurance profit recorded KRW 104.7 billion, expanding KRW 55.1 billion year-over-year.
[Non-English content]
In Q2, underpinned by stronger pricing policy and volatility management, we will seek to enhance profitability. Through growth strategy, pivoting on the specialty line and diversifying overseas insurance and geographic markets, we will continue to expand levers for growth in the global market. At the same time, we will manage domestic and overseas portfolio in balance and fortify stable foundation for profit generation.
[Non-English content]
Next is asset management. Despite greater financial market volatility at the beginning of the year, in order to enhance book yield, we proactively shifted the bond portfolio and drove efficiency gains, which supported interest and dividend income expansion. As a result, Q1 investment yields recorded 3.68% with AUM-based investment profit of KRW 853.7 billion, up 15.4% year-over-year, sustaining high rate of growth.
[Non-English content]
Moving into Q2, SFMI will rigorously manage asset quality of domestic and overseas real estate and retail loans while securing high-yield interest paying assets and building a high return portfolio around private equity so as to counter market volatility, underpinned by a balance between stability and profit generation as we broaden the basis for sustainable investment returns.
[Non-English content]
Against operational backdrop, where industry as a whole is feeling the pressure on profit with uncertainties stemming from fierce market competition and rise in claims, SFMI has made a proactive shift to management, pivoting on robust and consistent profitability, driving stronger core competitiveness at the company level. Insurance profit has shifted back to growth in Q1 of 2026, and investment profit also continued to expand as well. We also expect higher equity method gains from additional investments made into Canopius, expanding the basis for future earnings.
[Non-English content]
In Q2, market, we expect, will continue to weigh down on us, but we believe the speed and extent of recovery will vary and are contingent on profit management capabilities and capital readiness. Since SFMI has been preemptive with its profit centric strategy, we expect to be able to sustain this robust growth trend underpinned by relatively stable earnings capacity and capital strength.
[Non-English content]
Furthermore, SFMI has been consistently implementing its Value-up Time to enhance shareholder value and is considering various different options for capital allocation. Through capital structure optimization and ROE enhancement, we will work towards shareholder value enhancement and have our distinctive value be better recognized by the market.
[Non-English content]
In the second quarter, Samsung Fire & Marine Insurance will innovate all of its business domains to differentiate our core fundamentals, and by taking on the bold challenge, will lay down a new foundation for growth to make 2026 a year of meaningful growth and shareholder value enhancement. Thank you.
[Non-English content]
That concludes the overview of our financial performance. We will now begin the Q&A session. Our executives from various business divisions are also present to respond to your questions. To facilitate and ensure a smooth Q&A session, we kindly ask that each participant limit their questions to a maximum of two at a time.
[Non-English content]
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.
[Non-English content]
The first question will be provided by Seong-Jin Kang from KB Securities. Please go ahead with your question.
[Non-English content]
Thank you for taking my question. Would like to ask you two questions this morning. First one has to do with the timing that you are currently forcing with regards to turnaround and the loss ratio trends. Despite the fact that there was a premium hike in February for auto insurance, we are seeing certain delays in terms of the guidelines and regulation on how to provide or how to treat the minor injury accidents.
There has been that delay in terms of the guidance. The second is also for the long-term insurance, although there's been an improvement on the experience variance, we still have seen on a year-over-year basis increases in loss ratio. From that backdrop, like to understand as to when the company is forcing a turnaround in loss ratio. Second is on your capital plan and shareholder return plan.
I know that there are many aspects that are still yet to be determined, but we are looking forward to a special dividend payout by Samsung Electronics in 2027. With that being said, that brings quite a bit of variability to your payout ratio and your whole capital planning or your shareholder return planning may become a little unclear with because of that factor. My question is this: Where does the company place more weight? Do you foresee that your payout ratio will start to increase as we go into the future? Does the company feel that gradually expanding the absolute size of the DPS is more important?
[Non-English content]
Yes, responding to your question, I am Kwon Young-jib, Head of Automobile Insurance Strategy Team.
[Non-English content]
As we've mentioned, previously, starting the second half of last year, we've been streamlining our discount riders. As was disclosed, there was an increase in the premium. We have adopted more customer by customer segmentation strategy, which is helping to support our profitability.
[None-English content]
As a result, as mentioned during the opening presentation, starting the second half of last year, we've seen earned premium per vehicle start to upturn. Absent any significant natural disasters in month of January and February, although we have not yet disclosed these figures yet, if you look at March numbers and April numbers, our profit as well as loss ratio is within the domain of what we had previously planned.
[Non-English content]
As you have mentioned, the government or the authorities has not yet implemented this new guideline on the minor injury patients. I understand that at this point, the authorities are engaging in discussions with regards to this regulation. In light of the current trend that we are seeing at SFMI in terms of our auto insurance on the earned premium per vehicle, and if we assume that these new guidelines start to kick in from the second half of the year, we believe that on a year-over-year basis, auto insurance loss ratio we expect will start to turn around.
[Non-English content]
Yes, responding, also to your question, I am Cho Eun-young, Head of Long Term Insurance Strategy Team.
[Non-English content]
The company, since 2025, has taken on a marginal profitability centric strategy. We decided to suspend selling high risk coverages and have streamlined our portfolio pivoting on high margin products. We have put in efficiency related efforts.
[Non-English content]
At the same time, we've been able to improve on our loss ratio through continuous expansion of high quality coverages, as well as acquisition of high quality new business that's supported by fair and reasonable cost base.
[Non-English content]
As in, for 2026, based upon the continuous efforts that we are putting in to attract high quality coverages, as well as to do away with abusive claim related behaviors, we expect the loss ratio trend to stabilize.
[Non-English content]
Yes, responding to your third question, I am CFO, Koo Young-min.
[Non-English content]
In terms of the value of plan that we have previously shared, basically, as is mentioned under that shareholder value enhancement plan, there is no change to our previous planning of expanding our payout ratio to 50% by FY 2028. We, you know, that uptrend is quite clear as you can see from the figures. Also, with regards to the proceeds from the sale of the Samsung Electronics shares, we've received repeated questions on whether that forms part of distributable or what can be distributed, what it is included in the dividend payout. Once again, yes, it is going to be included in the dividend as well. After this year, we will be, you know, we will be able to see the impact as we go forward on this dividend.
[Non-English content]
This is Cho Beon-hyung. I'm Head of Corporate Management Support Team. Just to elaborate, just following up on what our CFO had said, our payout ratio is progressively going to uptrend. That basically is our key principle. As long as our earnings and our profit size continuously goes up, our payout ratio is also going to uptrend, and that naturally is going to lead to higher DPS as well. I think this is not an issue of which aspect we're going to place more emphasis on. For the benefit of shareholder return, we are going to be mindful of continuous growth as well as progressively expanding the payout ratio as well as the DPS size as well. Considering all of those factors, we will be reflecting and incorporating that in our dividend payout plan.
[Non-English content]
Thank you for your question. We'll now take the next question.
[Non-English content]
The following question will be presented by MW Kim from JP Morgan Securities. Please go ahead with your question.
[Non-English content]
Thank you. I am Kim Myung Wook from JP Morgan. I have like to ask you two questions. First, relating to your long-term insurance, you've mentioned that your strategy pivots on profitability and profit. I see that that had translated into improvement in long-term insurance-related metrics and indicators. My question is this, if you continue on with this strategy, I would like to know that for your new business CSM, what would be the extent of year-over-year decline? I would also like to know what effect and impact this is going to have on your long-term insurance's risk loss ratio. That if you give us that color, it will be helpful for us to make projection as to how that risk loss ratio moves going forward.
Because you do share with us the first month risk loss ratio and the 12th cycle or 12-month loss ratio. Based upon the risk premium, I would think that over the past year, the share of the new business that came in must be smaller compared to the total risk premium that you are currently accruing. Would like to know as to the size of the new business CSM as well as the risk loss ratio efficiency. Second question is, in 2026, if we look at this movement of the solvency ratios, aside from the market risk, we see that the required capital is not actually going up.
With earnings and profit continuously increasing, it will actually drive up the available capital. What would be your K-ICS target at the end of the year? Do you still consider your 220% target solvency ratio to be a reasonable target? If you can provide some details as to how you would be making use of the excess capital that's generated in the second half of 2026, that would also be quite helpful.
[Non-English content]
Yes, this is Cho Jinman. I'm the Head of Long Term Insurance Strategy Team responding to your question.
[Non-English content]
In Q1 of 2026, despite the fact that the new business CSM volume actually downsized, there has been an improvement on quality. We focused on high margin products, focusing particularly on MyFit product offerings and expanding the age term products, which helped improve our portfolio. We were able to drive up CSM multiple, which made up for that decline in new business CSM.
[Non-English content]
Moving into the second quarter of 2026, we are going to continuously implement our management strategy that really focuses on generating future value. We will continue to expand based upon high quality new business acquisition, that will help us stabilize the new business CSM. For this year, our newest new business CSM is expected to be flat year-over-year.
[Non-English content]
Also the risk premium portion of the new business is not too small. It is at around 10%. The high quality new business that we acquired since 2025, therefore, we expect will also help with stabilizing our loss ratio.
[Non-English content]
Responding to your second question, I am Jung Bok, Head of RM Team.
[Non-English content]
Regarding the year-end K-ICS ratio, of course, it will change depending on how the interest rate and the stock prices move. As of today, our expectation is that it will be at around 260%.
[Non-English content]
As you've mentioned, yes, the available capital has gone up, through alternative investment and our global overseas in-investment, we are using our required capital. These numbers may be subject to certain changes.
[Non-English content]
Thank you for your question. We'll now take the next question.
[Non-English content]
The following question will be presented by Shinyoung Park from Goldman Sachs. Please go ahead with your question.
[Non-English content]
Thank you. I am Shinyoung from Goldman Sachs. First question relates to the timeline of your Corporate Value-up Program based upon the announcement on Corporate Value-up Program that you made end of January. Since that point in time, we haven't really seen a strong commitment really play out in real life in terms of improvement of that Value-up or the shareholder return related actions. Considering that the holdings that you have of SEC, Samsung Electronics, the value had really gone up. I would think that all of these aspects is expected to bring down your ROE. I think it's number one priority for the company to really try to drive up capital efficiency to be within your ROE target of 11%-13%.
I would think that you either accelerate the timeline of achieving that 50% payout ratio target or actively, you know, make use of that excess capital. Do you, just like other Korean commercial banks in Korea, have plans to accelerate the timeline? When you talk about your excess capital plans, you haven't really mentioned how you would use your preferred equities. If you could provide a little more color, that would be quite helpful. Second is in terms of the size of the CSM adjustment. This quarter, it was very small. Is it due to one-off reasons, or is it because of qualitative growth which helped you improve on your persistency ratio? Is it because of your conservative assumption versus conservative assumption that you took compared to your peer competitors?
[Non-English content
Yes, responding to your first question, I am CFO Koo Young-min.
[Non-English content]
Yes, the ROE level is around 11% as per our mid to longer term Value-up Time. At this point, you know, we are putting an effort to really maximize the efficiency of our capital use. For us, gaining growth engine for future growth is important, and we place foremost priority on further enhancing the shareholder value. At this point, internally, we're making continuous reviews and looking at different options to actually achieve that maximized shareholder value. It's quite difficult to say at this point because we have yet to make our plans much more concrete. Once the details are laid out, we will make sure that we come back to you and share that with you. In that process, we will fully incorporate and, you know, incorporate the feedback and the messages that you've shared with us.
[Non-English content]
This is Cho Jinman, again, Head of Long-Term Insurance Strategy.
[Non-English content]
Q1 CSM adjustment basically with an upward trend and persistency ratio for the protection type as well as improvement in RA. There was an increase of KRW 0.11 trillion year-over-year.
[Non-English content]
Going forward, rather than focusing on growing our top line volume, we're going to focus on strengthening the fundamentals of our core, continuously acquiring high quality new businesses so that we can continuously improve on our persistency ratio to make sure that we can stabilize CSM adjustment that stems from changes in the assumption. In that process, we will seek to grow the CSM volume.
[Non-English content]
Thank you for your question. We'll now take the next question.
[Non-English content]
The following question will be presented by Jaewoong Won from HSBC Securities. Please go ahead with your question.
[Non-English content]
Thank you for good results despite very difficult operational backdrop. You know, regarding the shareholder return, there were good questions asked previously, so I'm okay with that. I would like to ask you questions on the fundamentals. With the adoption of the five-day rotation system, would like to know what impact that had on your loss ratio. Is it actually selling well? That's the first question. Compared to your mileage auto insurance, I mean, are people more drawn to it or less drawn to it compared to that product? Because of such rotation system, I would think that, you know, that may have some impact in delaying your loss ratio improvement trajectory. Is that the case?
Second question is, would like to know as to what impact the fifth-generation medical indemnity products will have on your company's CSM. I would just assume that it will actually have an impact of bringing down the CSM margin. I mean, first, is that correct? Also, however, from a longer-term perspective, it may be positive in terms of experience variance and on your liability side. Short-term, it may have negative impact, but long-term positive impact. Is that correct understanding? Also, is it better for you to sell more such products?
[Non-English content]
Yes. Responding to your first question on auto insurance. I am Kwon Young-jib, Head of Automobile Insurance Strategy.
[Non-English content]
Regarding the five-day rotational system, I know that in the news article, that this in fact would have a retroactive effect as of the April 1st. Now this is providing 2% discount to people who participate in this program, but in actuality, we've been receiving the application starting this week. So, it's too early to say, as to how many our policy holders are actually taking out or applying for this.
[Non-English content]
This five-day vehicle rotational program, yes, it would provide 2% discount, but with the adoption of this program, it will have impact on lowering the mileage traveled as well as lowering the accident rate. All in all, in practical purposes, I would think that the negative impact it will have on our P&L will not be big at all.
[Non-English content]
Responding to your second question. I am Kwon Gisun , Head of Long-term Product Development Team One.
[Non-English content]
With regards to the fifth-generation medical indemnity, the co-payment share for the non, for non-critical illnesses are going to go up. Also the non-benefit items, which is quite subject to abuse will also be eliminated. Compared to the fourth-generation medical indemnities, both the claims and the premium will go down by 30%.
[Non-English content]
Now, having said that, the fifth generation, therefore, we believe we are going to start to see stabilization of the increases in the amount of loss claims, with regards to the big loss claims. However, already the medical indemnity loss ratio is above 100% at this time. The short- term impact as to the improving impact from fifth generation would have to be closely monitored. From a mid to longer term perspective, we are looking forward to stabilization of the loss ratio trend. Also from the consumers perspective, they will also benefit from more attractive premium.
[Non-English content]
Now, in terms of the detailed levers that impact the CSM, we would have to closely monitor, you know, how much of our consumers and users are going to subscribe to the fifth-generation medical indemnity. There will be a mixed impact from fifth-generation and that it will help in terms of stabilizing the loss claims. On the other side, we have to think about the buyback effect that's going to start from November. I understand the authorities are currently thinking of ways to soft land that program come November. We would have to closely monitor how things play out.
[Non-English content]
Thank you for your question. We'll now take the next question.
[Non-English content]
The following question will be presented by Byunggun Lee from DB Securities. Please go ahead with your question.
[Non-English content]
Thank you for taking my question. If we could go to page six for your auto insurance. Thank you for providing us with more data compared to the previous year. You are providing us with a earned premium per vehicle, as well as the loss per claim, which is quite helpful because you did use to provide it up until 2022. After that point in time, you just shared with us as to the sensitivity and the impact. These two indicators are quite important because we've been going through a certain timing where there was a quite a bit of a change, and we need to be able to have access to this data for us to be able to verify and check the reasonableness of the company's estimate.
I ask for the provision of such data going forward. Second question is that you did seem to have used quite a bit of new acquisition costs quite significantly. since your strategy shifts and is pivoted based upon high margin products, I would think that the situation would continue onwards. considering the changes in the regulation in July, would like to know whether going forward, the new acquisition cost spend is going to be less as we go into the future.
I ask this question because it's an element that is required for us to understand and project on the size of your surrender value reserve. when we ask other companies in the industry, the second half surrender reserve trend is also going to be quite flat. It is from that aspect, or that's the background as to this question that I'm asking.
[Non-English content]
Yes, this is Kwon Young-jib from Head of Auto Insurance Strategy, responding to your 1st question.
[Non-English content
Okay. If you look at Q1 2026, earned premium per vehicle for was KRW 152,500. Previous year, it was at around KRW 156,000.
[Non-English content]
Coming into the first quarter, we've seen the trajectory upturn. In Q2, Q3, Q4, going forward, our internal assessment is that we will be able to increase this on a monthly basis by around KRW 2,000-KRW 3,000.
[Non-English content]
To sum that up, on a year-over-year basis, starting the second quarter, we will be able to see an upturn.
[Non-English content]
Responding to the second question, I am Cho Jin-man, Head of Long Term Insurance Strategy Team.
[Non-English content]
Starting July, the 1,200% rule for the initial new business, that rule for the GA, the agent is also going to expand and apply to the GAs as well. On top of that, across the industry, all of the companies are putting in efforts to improve on their CSM multiple. We believe that when it comes to new acquisition costs, compared to the first half, we will be able to expect a decline in the new cost.
[Non-English content]
This is Cho Eunyoung. I'm the appointed actuary. I took your question to be a voice of concern regarding regarding the surrender value reserve. In terms of the changes and the guidances and guidelines by the authorities on the selling expenses, we do not think that this will have any immediate impact on the numbers that we see for this year. Going forward, about maybe four to five years down the road, we believe that it will have a downward effect.
[Non-English content]
Thank you for your question. We'll now take the next question.
[Non-English content]
The following question will be presented by Do-Ha Kim from Hanwha Investment & Securities. Please go ahead with your question.
[Non-English content]
Thank you for taking my question. My first question relates to the experience variance. I believe that the improvement in experience variance was because of a very steep increase in increase or adjustment made on the expected claims, not on the actual claims that's been paid. I think what this improvement shows is it's actually a sacrifice of future profit that the company would be gaining. Considering the fact that the business days were also not, you know, small in Q1 as was the case in Q4, I would like to know as to what the actual claims was, not the, you know, estimated or projected claim figure, because that would be quite helpful for us to make future projections.
Second is on the dividend question. I think that the, you know, you've answered it quite a bit, but the reason why we're continuously asking this question is that it's only natural that the gain from the proceeds from the sales of the Samsung Electronic shares be part of the dividend payout and for the company to be continuously, progressively expanding the payout ratio and DPS, I think is the basic premise. It is something that is already given. What we wanted to know was that if there is non-recurring or any one-off factor that could be part of that dividend support, you know, would you be willing to or do you have certain hesitation in including that in your distributable income consider? If that, you, if you have a hesitation, you know why? What would be the reason?
Because you have enough amount of excess capital. Third is a follow-up question on the surrender value reserve. Just to check whether my understanding is correct, is because I would like to know as to the reason why you are saying that the impact will actually be, you know, shown over the four to five-year period. You know, why would that delayed impact?
[Non-English content]
SIAM Cho Jinman, Head of Long Term Insurance Strategy Team.
[Non-English content]
In terms of the claims experience or the claims variance, it was KRW 2.4 billion, which is an increase of KRW 25.8 billion.
[Non-English content]
Well, as you said, because of the changes in the assumption at the end of last year, the expected claims, the loss claims had gone up. That's one factor. Also, we've seen some improvement quite significant on the claims side with regards to the living coverage.
[Non-English content]
Especially on the Q12 basis, we've seen an experienced variance of KRW 120 billion. Mostly there were multiple levers that impacted it. Particularly we've seen quite salient improvement on the claims, lost claims from the living coverage.
[Non-English content]
Responding to your second question, I am Cho Beon-hyung, Head of Corporate Management Support.
[Non-English content]
On dividends regarding the sales proceed from sales proceed from Samsung Electronics shares and the special dividends that we are receiving that will form the part of distributable income that will be used for dividend payout. In terms of to what extent that will be, we will go through internal discussion and once that is finalized and concluded, we will come back to you and communicate with you the details. The distributable income as well as use of the excess capital for investment purposes. Those are two separate issues. I can tell you that we will not be, you know, hesitant on making the dividend payouts because of a certain investment that is required.
[Non-English content]
This is Jo Eunyoung, the Appointed Actuary. The answer that I provided also includes the effect of the evenly spread allotment payment as well.
[Non-English content]
Now, the factors that impact the size of the surrender reserve is the size of the revenue and sales, and also with regards to the policies that's been sold on new acquisition costs, when and how, and the payment schedule with regards to the payment relating to those new businesses.
[Non-English content]
The amount that's going to be reserved for this year actually comes from insurance contract that was sold the previous year and two years ago. These commissions that were spent for those other previously sold policies are now being reflected and being used, reflected on the reserve. It's from that perspective why the other peers or other companies have said that for this year, the impact is not that big.
[Non-English content]
Also depending on the distribution channel, there is a commission that is actually paid out, not just in year one, but year two and year three as well. That is why I've said that the impact is gradually going to also be reflected as we go forward.