Good morning and good evening. Thank you all for joining the conference call for the Samsung Life 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 Life Insurance's Third Quarter of Fiscal Year 2025 Earnings R esults.
[Foreign language] our earnings presentation despite your busy schedules. Before the Q&A session, I will briefly talk about the key achievements for the third quarter based on the materials we have distributed.
Yes, good afternoon. This is Kim Yong-gwon, Head of the IR team. I would like to extend my sincere thanks to everyone for joining us today at our earnings call despite your busy schedules. Before proceeding to Q&A, I will briefly take you through our third quarter business highlights.
당사는 2025년 3분기 누적으로 신계약 CSM 2.3조 원을 달성하였고, 이 중 건강상품 CSM은 생명보험 업계 간 경쟁이 심화되는 환경 속에서도 전년 동기비 23.9% 증가한 1조 7,517억 원을 기록하며 신계약 CSM 성장을 견인하였습니다.[Foreign language]
As of the third quarter year-to- date, we recorded new business CSM of KRW 2.3 trillion. Amid intensifying competition between life and non-life insurers, health CSM was the main driver of new business CSM growth, recording KRW 1 trillion 751.7 billion, up 23.9% year- over- year.
신계약 CSM 마진은 전체 월납 초회보험료 대비 11.5배, 건강상품의 경우는 16.8배로 견조한 수준을 유지하고 있습니다. 건강보험에서는 고객 니즈에 따라 상품 라인업을 체계적으로 확대하고 있으며, AI를 활용한 위험률 개발, 건강상태에 따른 할인 등 상품 경쟁력을 확보하기 위한 노력을 지속하고 있습니다. 종신보험은 사망보장에 좀 더 포커스를 맞춘 상품 구조 개선으로 적정 수익성을 유지할 것입니다. [Foreign language]
Overall, new business CSM margins remain solid at 11.5x against first month premiums and 16.8 times for health policies in particular. We have been expanding our health lineup in a systematic manner, introducing pure health and refund-type policies which reflect customer needs. We have been leveraging AI-based risk rating models, also offering premium discounts based on the health status of policyholders and expanding value-added ancillary services, all as we continuously work to enhance our competitiveness. We are also refining the structure of our whole life products with a greater focus on death benefit coverage to maintain an appropriate level of profitability.
당사 전속 FC 조직은 4만 2천 명 수준까지 증가했으며, FC에 대한 판매 교육 강화 및 차별화된 인프라 지원을 통해 전속 조직의 생산성 및 정착률도 제고되고 있습니다. 이와 더불어 비전속 시장의 커버리지를 확대하고자 GA 채널의 가동 지사 및 가동 설계사 수도 늘려나가며 CSM 성장의 기반을 더욱 공고히 하고 있습니다. [Foreign language]
Our exclusive FCs have now increased to 42,000, and we are seeing both productivity and retention improve as we strengthen sales education for FCs and provide differentiated infrastructure support. As we look to expand our coverage in the non-exclusive markets as well, we are boosting the number of active GA branches and active planners to drive stronger CSM growth.
[Foreign language] increase of KRW 1.1 trillion from the beginning of the year, driven by new business CSM performance of KRW 2.3 trillion.
As of the end of the third quarter, our CSM balance recorded KRW 14 trillion, up KRW 1.1 trillion YTD from robust new business CSM performance.
3분기 누적 지배주주 연결 당기순이익은 CSM 순증 기반 보험 서비스 선익 확보와 운용 수익률 개선을 통한 투자 손익 증가 등을 통해 전년 동기비 3.7% 증가한 KRW 2,117.1 billion을 시현하였습니다. [Foreign language]
Net profits attributable to controlling shareholders rose by 3.7% year- over- year, recording KRW 2.1171 trillion, thanks to solid insurance service profits driven by net CSM growth, as well as increased investment profits from investment yields.
[Foreign language] 193%, maintaining a top-tier level in the industry, and we will continue to maintain solid capital soundness through securing high-quality new business CSM and thorough ALM management efforts going forward.
Our RBC ratio was 193%, up 6 percentage points from the end of the second quarter. As we maintain top industry levels, we need to maintain a solid capital adequacy position into the future, boosted by high-quality new business CSM and rigorous ALM.
당사의 펀더멘털은 건강상품 중심 신계약 CSM 성과와 철저한 효율 관리를 통한 보유 CSM 순증, 운용 수익률 제고 및 연결 자회사 손익 기반 확대 등으로 개선세가 지속되고 있습니다. 올해도 경상이익 성장을 바탕으로 중기 주주환원율 목표에 부합하는 적정 수준의 주주환원을 실시하여 시장에서 회사 가치를 더 인정받을 수 있도록 하겠습니다. [Foreign language]
We are seeing continuous improvements in our underlying fundamentals, thanks to strong new business CSM driven by health product growth, a net increase in our CSM balance from strict efficiency management and management gains, and also from broadened earnings base from our consolidated subsidiaries. This year, as before, we will continue to implement shareholder return policies in line with our midterm shareholder return targets to enhance corporate value and support greater market recognition of our corporate value.
이후 실적 세부 내용은 사전에 배포해 드린 자료를 참고해 주시기 바랍니다. 컨퍼런스 콜을 통해 언급되는 전망치는 국내외 경제 상황 및 영업 환경 변화에 따라 추후 변경될 수 있음을 감안해 주시기 바랍니다. 그럼 지금부터 질의응답을 진행하겠습니다. [Foreign language]
Please refer to the materials that we have provided for you in advance for further details on our performance. Please be advised that forward-looking statements mentioned in today's call may be subject to change going forward from changing economic and overall business conditions in and outside of Korea. With that, we'll now start our Q&A.
지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다. [Foreign language]
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.
처음으로 질문해 주실 분은 JP Morgan의 MW Kim님입니다. [Foreign language]
The first question will be provided by MW Kim from JP Morgan. Please go ahead with your question.
예, 안녕하십니까. JP Morgan 증권의 김명욱입니다. 질문 기회 주셔서 감사드립니다. 두 가지 여쭤보고 싶습니다. 첫 번째는 이제 시장에서 이 삼성생명의 배위업에 대한 그런 기대가 좀 많이 있는데, 그 이제 반기 대비해서 특별히 이제 장표에서 좀 더 바뀐 내용이 없는 것 같아서 우선 여쭤보고 싶은 부분이 현재 배위업이 좀 늦어지는, 공시가 늦어지는 이유가 어떤 부분인지 좀 여쭤보고 싶고요. 그리고 이제 아무래도 연말이다 보니까 저희가 이 배당 관련 이게 좀 이 추정을 좀 해야 되는 부분들이 있을 것 같습니다. 그래서 좀 궁금한 부분은 올해 1Q에도 이제 전자 주식도 이제 매각을 하셨고, 그래서 이제 이전에 그 배당에 좀 재원으로 활용을 하겠다라고 말씀을 좀 해주시기도 했는데, 아 저희가 이제 향후에 이 그 전자 주식을 매각을 한다라고 이렇게 가정을 하고 또 그런 이벤트들이 지금 이제 뭐 있을 수 있는 여지가 많이 있는데, 이제 전자도 바이백을 좀 하고 캔슬만 아직 안 하고 있고 뭐 이런 부분들이 있어서요. [Foreign language]
이제 만약에 이제 그 향후에도 이런 매각이 좀 진행이 된다 그럴 때, 어 저희가 이 부분과 관련돼 가지고는 어떻게 배당을 좀 추정하는 것이 좋을지 좀 여쭤보고 싶습니다. 어 구체적으로 이 전자 관련 배당은 기존의 그 프로그레시브 디비던드와 별도로 이 스페셜 디비던드로 저희가 이제 좀 추정을 하면 될지, 그래서 예를 들면은 뭐 매각 이게 현재의 배당 성향 정도를 고민을 해서 좀 이렇게 추정을 해도 합리적인 부분인지, 아니면 회사가 이 부분 관련해서 좀 가이던스를 주실 수 있으신지 이게 좀 궁금합니다. 그리고 어 두 번째로 좀 여쭤보고 싶은 부분은 어 이제 선진국에서 어 시작이 돼서 지금 이제 아시아까지 많은 보험사들이 이제 프라이빗 크레딧에 대한 자산을 좀 늘리려는 그런 모습을 좀 볼 수가 있습니다. [Foreign language]
근데 이와 관련해서 이제 그 10월 달에 IMF에서도 이제 좀 보고서도 좀 발표가 되고 그랬었는데, 좀 이제 그 궁금한 부분은 삼성생명이 한국의 대표 보험사로서 이런 어 프라이빗 쪽에 자산 운용을 향후에 좀 더 늘리실 그런 계획이 있으신지, 그리고 만약에 이제 이 부분을 늘리신다라고 한다면 이게 이제 그 보험사의 그 리스크 리워드 차원에서 좋은 투자 결정인지, 특별히 이제 아무래도 이제 솔번스 캐피탈이 채권 투자보다는 감소가 좀 많이 될 수 있을 것 같은데, 그래서 이제 솔번스 캐피탈의 컨섬션이나 자산 부채의 매칭, 뭐 유동성 이런 부분을 고려를 했을 때 이 프라이빗 크레딧이라는 쪽에 이 보험사의 투자에 대해서 회사가 좀 어떻게 생각하고 계신지 이 부분도 말씀해 주시면 감사드리겠습니다. [Foreign language]
Yes, this is MW Kim. Thank you for the opportunity. I will be asking two questions. It seems that on the market there are growing quite good expectations towards Samsung Life Insurance in terms of your value-up program. When I look at the materials compared to what was made available at the end of the first half, I do not note any major difference. Is there any particular reason why your announcement of the value-up program is being delayed? Apparently, it is toward the end of the year, so for us, we do have to make certain projections about expected dividends, which is why I would like to ask for more details. In the first quarter, you did dispose of Samsung Electronics shares, and you did comment that those proceeds would be used as part of the pool of distributable dividends.
Going forward, supposing that you have more disposal of Samsung Electronics shares, and I think conceivably there can be a lot of room for those types of events given how Samsung Electronics themselves have done a lot of buybacks, it's just that they have not canceled out the whole amount just yet. If we suppose that there are further disposals of such, what should we be projecting in terms of our expected dividends for Samsung Life? Regarding Samsung Electronics dividends, for example, separate from the progressive dividend guidance, could we expect special dividends, for example, and embed that into our projections? Would that be fair? If we can take the disposal proceeds multiplied by the current payout, would that give us some reasonable estimate of how much we can stand to be distributed from [Samsung Electronics] disposal? If not, could the company provide more guidance?
The second question has to do with private credit. It seems that starting from the advanced markets now into Asia, more insurance companies are actually investing more into private credits or private debt assets. In the IMF report that was out in October, I think, that was mentioned as well. As a representative insurance company of Korea, what are your thoughts in terms of insurance companies investing more into private debt as an asset class? Do you, in fact, have plans to increase those types of asset holdings for Samsung Life? In terms of the risk-reward, do you think that it is in the interest of insurance companies to do more private credit, in view of solvency capital and asset liability matching, also liquidity profile? Your thoughts?
Insurance CFO Lee Yeon-seop.
Yes, this is the CFO. My name is Lee. 먼저 밸류업 공시가 지연되고 있는 점에 대해서는 대단히 죄송스럽게 생각을 하고 있습니다. 근데 회사 내부에, 어, 이 밸류업 공시 지연이 특별한 사유가 있는 것은 아닙니다. [Foreign language]
I do, apologize for the delay in our announcements, for value-up program, but it's not for any particular internal reason, that there is this delay.
현재 그 대내외 시장 상황과 그 정부의 그 자사주 소각과 관련한 법 개정 방향성 및 진행 경과를 지켜보고 있고요. 적정한 시기에 밸류업 공시가 가능하도록 지금도 최선을 다하고 있고 앞으로도 최선을 다하겠습니다. [Foreign language]
Currently we are actually observing developments as they play out, in terms of the direction of law or amendment of laws, with regard to the cancellation of treasury shares, led by the government. Also, we are observing market conditions in and outside of Korea as well. We are doing our best, and we will continue to do our best so that we can make our value program public and available to you at an appropriate time.
[Foreign language] earlier this year will be used for shareholder dividends separately from recurring profit. I cannot specify the exact payout ratio at this time, but we will review it at a reasonable level and communicate proactively in the future.
In terms of our disposal gains on Samsung Electronics shares, earlier in the year, as we have explained before, for those disposal gains, we will distribute, in the form of, dividends separate from our ordinary or recurring profit base. In terms of the actual payback, I cannot specify at this time, but we will be defining a rational or reasonable level, and once that is set, we will communicate back with you.
그리고 전자가 지금 올해 2차, 3차 자사주 매입을 했고, 자사주 소각 한다고 발표를 했는데 지금 소각 시기를 정확하게 안내하지 않았습니다. 전자 지분 매각에 대한 종합적인 배당 계획은 조금 전에 말씀드린 대로 합리적인 수준에서 검토해서 말씀드리도록 하겠습니다. [Foreign language]
Samsung Electronics has announced their plans to do further follow-on, second round and third round share buybacks and also cancellations, but they have not specified in terms of the exact timing. Overall, in terms of the overall dividend payout plan with regard to disposal of SEC shares, we will again do a very comprehensive and rational review and update you further.
끝으로 회사가, 어, 소통하고 있는 그 주주 환원 확대 정책은, 어, 제가 차질 없이 추진해 나가도록 하겠습니다. [Foreign language]
We are very strongly committed to implementing the shareholder return expansion policy that we have so far been communicating with you on.
네, 안녕하십니까. 자산운용 부문의 김혜진 상무입니다. 보험사, 저희 보험사에서는 이제 프라이빗 크레딧 관련해서 자산을 투자하고 있긴 합니다. 근데 일반적으로 일단은 ALM을 가장 우선적으로 하고 있는 스탠스를 유지하면서 남은 자금으로 대체 자산을 투자하는 스탠스는 계속 유지하고 있고요. 그 중에 일부가 프라이빗 크레딧을 투자를 하고 있기는 합니다. 그래서 현재까지는 제간접 형태로 투자하고 있었습니다. 다만 그 비중은 현재 뭐 0.1%도 되지 않을 만큼 적은 비중이라고 보시면 됩니다. 다만 아시다시피 글로벌 자산운용 사업 확장을 위해서 최근에 저희가 헤이핀 운용사 인수하였습니다. 당연히 시장에서는 갑자기 삼성생명에서 프라이빗 크레딧을 대폭 확대하는 것 아니냐라고 걱정하실 수도 있을 것 같습니다. 우선 자금 측면에서는 아까 말씀드렸듯이 현재의 작은 포션이고 앞으로 늘리더라도 아직은 여전히 작은 거라는 점 말씀드리고 싶고요. 저희가 파트너십을 맺은 헤이핀도 해당 업계에서 풍부한 운영 경험을 가지고 있는 것은 물론이고 경영진들도 법조계 인사 중심으로 구성돼 있어서 자산 회수에 대한 경험이 많은 것이 특징입니다. [Foreign language]
Yes, this is Woojune Kim, Head of the Asset Management or Investment Management team. In terms of private credit exposure, yes, we do have some private credit assets, but it is to a very minimal extent, because first and foremost, the most important thing is our ALM-based stance and remaining investments are allocated into alternative assets, and a very small, less than 0.1% portion of those alternative assets are invested in private credit, mostly now in the form of fund- of- fund type instruments. As we are looking to expand into the global asset management market, we have recently acquired Hayfin. I think this may have prompted concerns on the market that maybe Samsung Life Insurance will now substantially increase our private credit exposure. I do understand where those concerns can be coming from.
However, again, our current exposure is very limited, and even if we do expand some, it will still be to a very limited extent. It happens that Hayfin, our new partner, actually has a lot of experience in management of those types of assets as well. The key management have very good legal background as well and are very experienced in exiting on those types of assets for recovery.
프라이빗 크레딧 시장이 앞으로 물론 계속 성장할 수도 있고 또는 우려하시는 것처럼 좀 안 좋아질 수도 있을 것 같습니다. 하지만 그 결과가 어떻든 상대적으로 안정적인 성과를 만들어낼 수 있는 회사라고 판단했기 때문에 근본의 투자를 결정하게 되었고 앞으로도 파트너십을 더욱더 강화해 나갈 계획입니다. 따라서 걱정하시는 상황이 없도록 잘 관리해 나가도록 하겠습니다. 이상입니다. [Foreign language]
It could go both ways. I suppose the private credit market can continue to grow, or as per your concern, it could actually deteriorate. In regards to this, of the developments, we were very confident that Hayfin would be very competent and able to deliver very stable returns, which is why we decided to go ahead with our recent investment. We will continue to build on our partnership with Hayfin as well and manage everything very tightly so that there is no cause for concern.
예, 상무님, 충분한 답변이 되셨습니까? 네, 감사합니다. 예, 그럼 다음 질문 받겠습니다.[Foreign Language]
다음으로 질문해 주실 분은 NH Investment & Securities의 정준성 님입니다. [Foreign Language]
The following question will be presented by Jun-sup Jung from NH Investment & Securities. Please go ahead with your question.
.[Foreign Language] quarter and for 2026, I am curious about what level we should be looking at for investment profit and loss. Especially recently, macro variables like interest rates and exchange rates seem to have shown a lot more volatility in unexpected directions. Considering this, how do you forecast these indicators going forward, and what level of recurring, quarterly investment profit and loss do you expect? Also, I understand there was a one-off sale in this third quarter, so if you have any plans for additional one-off sales going forward, I would appreciate your answer on that as well.
Yes, thank you. I will also ask a question regarding your investments. In terms of looking out to the fourth quarter and 2026, could you just inform us to set our expectations for what kind of quarterly investment income you expect on an ordinary or recurring basis? There are many macro indicators, including interest rates, that have been moving outside of expectations many times, with widening volatility as a result. What is your company outlook regarding those macro indicators? Again, what is your expectations in terms of investment gains on a quarter-quarterly basis? Also, in the third quarter, there was a one-time disposal gain this time. Do you have more disposals planned going forward?
is Kim Hye-jin, Executive in asset management. [Foreign Language]
Yes, this is Kim Hye-jin from Asset or Investment Management.
4분기 전망에 대해서 말씀드리겠습니다. 4분기 금리. [Foreign Language]
Yes, so let me take you through our outlook for the fourth quarter in terms of various indicators, for example, interest rates.
[Foreign Language] level if the current interest rate situation and exchange rate are maintained. However, the one-off sale in the third quarter, like the real estate sale, is not something that happens frequently for us, so we do not expect it to occur again for the time being.
In terms of the fourth quarter and 2026 outlook, assuming that current levels of interest rates and also FX rates are maintained, we are assuming similar levels of investment gains, relative to now. In the third quarter, we did have disposal gains on disposal of real estate property, but this is not a very frequent type of event, and we do not expect more in the near future.
[Foreign Language] 예, 충분한 답변이 되셨습니까?
yes, thank you.
will take the next question.
다음으로 질문해 주실 분은 DB Securities의 이병권 님입니다. [Foreign Language]
The following question will be presented by Byun- Jin Lee from DB Securities. Please go ahead with your question.
the trend after the transition, the interest margin, especially related to insurance claims, seems to be widening on the negative side. In this regard, I would like to ask where the negative interest margin is mainly occurring when viewed by fair value, retrospective application, and other blocks, or by underwriting year, and how you are analyzing the main causes of the negative interest margin. At the same time, reflecting this trend, I would like you to give some guidance on how much you expect the year-end CSM adjustment effect to be. Second, since we started with a relatively short retrospective period, although that is not necessarily the reason, the net increase in CSM compared to non-life insurers still seems to be coming out well, but considering the elapsed period after application, it seems that we are now approaching the level that non-life insurers had when they started initially.
어, 향후 연간 CSM 순증에 대해서, 어, 사실 손보사들의 케이스를 놓고 보면 그렇게 저희가 낙관할 수는 없는 것 같은데요. 어, 어떻게 전망하고 계시는지 가이드를 주셨으면 합니다. 이상입니다. [Foreign Language]
Yes, this is Byun- Jin Lee from DB Securities. I appreciate that you were able to manage your performance well despite the challenging circumstances. I have two questions, mostly on your operating variance, particularly from claim, claim payments. If you look at the trends, it seems that claim payment operation or operating variance actually is widening, in terms of the negative toward the negative territory. What type of policy blocks, perhaps by underwriting year, what block is it that is contributing the most to that kind of variance? What do you think is the fundamental cause for this type of negative variance? Your guidance, please, when reflecting these trends, what kind of effect do you think this will have on CSM adjustments at the end of this year? Second question, I'd like to ask for your guidance on full year net increase in CSM as well.
In terms of the retroactive period, you started, or things started out on the shorter end, for the non-life insurance companies, their net CSM increase actually has been quite good. If you look at post-application in the time that has lapsed, I think they are now reverting, circling back toward their starting point levels. Given the kicks levels of the non-life insurance companies, it's not something that we can be purely optimistic about. If you could provide more guidance on your side in terms of net increase CSM on a full year basis.
네, 안녕하십니까. 계리팀장 변인철입니다. 주신 질문 답변 드리겠습니다.[Foreign language]
Yes, this is Byun In-cheol from the actuarial team. I'll, we'll address your question.
예, 그 전환한 이후에 보험금 예실차가 이제 조금씩 커지고 있는데 현재 그 파악한 바로는 저희가 이제 공정가치를 대부분 적용하고 소급을 1년 한 상황에서 그 과거 보유 계약, 즉 공정가치를 적용한 블록에서 좀 예실차가 이제 조금씩 발생한다, 커지고 있다라고 보시면 될 것 같습니다. [Foreign language]
In terms of the reason for widening, variance for claim payments post-transition, we have applied fair value valuation for the most part, with one-year retroactive application. In fact, most of the negative or the widening variance is coming from fair value, the fair valuation block from past sold, legacy, policies.
어, 좀 세부적으로 이유를 보면은 이제 과거에 저희가 2000년 초반에 팔았던 일부 건강상품 보험의 레거시, 그다음에 1990년대에 팔았던 연금보험이 어떤 저희가 생각하는 자연 감소분보다 좀 그 감소 폭이 작아지면서, 어, 일부 이제 특정 기간에 예실차가 발생하고 있습니다.[Foreign language]
So again, these are legacy products, health policies sold early in the 2000s or annuity-type insurance policies sold in the 1990s. Relative to our expectations, against natural attrition, the actual decrease was less. We are seeing widening of variance from a certain block of these policies from this specific time period.
그리고 지금 3분기 예실차가 이제 소폭 커진 거는 좀 일회성 요인으로 보고 있는 부분이 있어서 연말 그 이런 손해율 과정 변경에 따른 CSM 조정 수준은 뭐 전년 수준 정도로 현재는 예상을 하고 있습니다. [Foreign language]
It is true that our variance in the third quarter has increased slightly, but mostly due to one-off factors. When we are looking at the impact of changes to assumptions, including loss rates, and how that will impact end-of-the-year CSM adjustments, we think that overall CSM adjustments will be similar to last year or end-of-last-year levels.
그리고 주신 두 번째 질문 답변 드리겠습니다. [Foreign language]
Moving on to your second question.
예, 그, 어, 3년 전에 세븐틴 전환할 당시 이제 많은 손보사들이 5년 소급을 하면서 관리해야 될 섹터들이 많아졌다고 알고 있고요. 그리고 이제 그 장래의 그 과정을 적용하는 부분에 있어서도 회사의 특성에 맞, 그 좋은 부분에 대해서는 약간 공격적으로 적용하면서 CSM이 상대적으로 생보사들보다 매우 높았다고 저는 기억을 하고 있습니다. [Foreign language]
Three years ago, upon transition to IFRS 17, most of the non-life insurance companies, I understand, applied five-year retroactive period. There was an increase in the number of sectors that they had to manage, and then they actually started to be more aggressive in terms of their assumption application. As a result, compared to life insurance companies, in relative terms, their CSM actually has been stronger as far as I recall.
결국 전환 이후에 보유 계약의 CSM은 상각 조정 등을 거치면서 이제 감소할 수밖에 없는 상황이고, 그러면 결국에는 이제 양질의 신계약 CSM을 어떻게 더해가느냐가 결국 회사의 그 장래 CSM 순증 기조를 견지하느냐 마느냐에 대한 중요한 어떤 관점이라고 생각합니다. [Foreign language]
Post-transition, obviously you have a starting point for your infor CSM, but from that period on, there will invariably be decreases to the CSM from amortization and adjustments. What is very key is how to add on high-quality CSM, going forward. Whether a company can do this or not, I think will largely determine whether we can maintain a net CSM increase stance or not.
[Foreign language] to continue to pursue various aspects such as profitability and product portfolio in order to secure new business CSM. It is difficult to say the exact net increase amount here, but you can expect that Samsung Life Insurance's held CSM will continue to show a net increase. That is all.
As you have seen, as you will know from seeing what we did over the last two years, we have been working very hard to secure new business CSM, and we have been working on various initiatives that will continue to further improve our margins, while we rebalance our product portfolio as well. While we cannot say definitively what the exact net increase number will be, it will be still safe for you to bet that we will continue to be able to see net increases to our CSM balance.
셰포입니다. 어, 회사는 보유 CSM 순증을 가장 중요하게 생각을 하고, 하고 있고 KPI로 운영을 하고 있습니다. 어, 이를 위해서 중장기 전략을 지속적으로 업데이트하고 있습니다. [Foreign language]
At the company level, we consider net increase to CSM as our number one priority, and it is a key KPI that we are measured against. This is, of course, reflected in our mid to long-term strategy as well.
보유 CSM을 지속적으로 순정하기 위해서 CSM율이 높은 건강보험, 어, 확대를 통한, 어, 신계약 CSM 증대와 해지 방어 적극 실행과 보험금 관리를 철저하게 하면서, 어, 효율 제고를 통해서, 어, 조금 전에 우리 변 상무가 얘기한 대로, 어, 삼성생명이 보유 CSM을 지속적으로 우상향해 갈 수 있다고 저희는 자신을 하고 있고 그렇게 전망을 하고 있습니다. [Foreign language]
In order to boost net increase in our CSM balance, we are continuing to work to secure new business CSM, particularly from the higher margining health-type products where there is a higher CSM multiple. Also, we are defending against cancellation and enforcing tighter control against claim payments as well. Overall, as we have heard from Mr. Byun now, we will be enhancing overall efficiency, which is why we are very confident that we will be able to continue to sustain upside trends and growth in our CSM balance.
예, 센터장님 충분한 답변이 되셨습니까? [Foreign language]
죄송한데 한 가지만 추가로 간단히 확인 좀 여쭤봐도 될까요? [Foreign language]
예, 예. [Foreign language]
그, 뭐 방금 전에 예실차에 대한 자세한 설명 감사드리고요. 이제 작년 말에 보게 되면 공정가치 블록에서 비용 효율화와 관련되어, 어, CSM이 플러스 된 부분이 일부 있었던 것으로 알고 있습니다. 그래서, 어, 방금 말씀하신 것이 올해도 뭐 그러한 것들이 반영될 수 있다라는 거를 감안하시고 말씀을 주신 것인지 그냥 그것만 간단히 확인 부탁드리겠습니다. [Foreign language]
I apologize, but if I can just clarify one thing real quick. In your explanation of the reason for the operating variance, I think, let me just first say last year, I think we saw how a fair value block, due to some expense efficiency measures, actually contributed to CSM growth. In your comments just now, were you mindful of this, that this may also be reflected this year as well?
네, 어, 짧게 답변 드리겠습니다. 작년에 이제 사업비 과정 일부 조정이 있으면서 일회성 요인으로 CSM 조정이 좀 있었는데요. 올해는 경상적인 조정만 있을 것으로 현재는 판단하고 있습니다. 이상입니다. [Foreign language]
So, last year there were some adjustments to our operating expense assumptions, and so there were CSM, there were CSM adjustments from one-off factors. But for this year, in contrast, we are expecting not one-off factors, but just recurring or ordinary factors resulting in CSM adjustments.
다음으로 질문해 주실 분은 한화투자증권의 김보하 님입니다. [Foreign language]
The following question will be presented by Doha Kim from Hanwha Investment & Securities. Please go ahead with your question.
[Foreign language] was a large expense reflected. After that, depending on the interest rate situation, you mentioned that this year, loss contract burden expenses could fluctuate quite a bit, in the range of KRW 200 billion-KRW 300 billion. In late September, interest rates spiked, and by the end of October, they rose even more sharply, so I think your outlook may have changed. This might be due to my lack of understanding, but when you evaluate these blocks at the end of the period, do you use the year-end interest rate, or the half-year-end, or the September-end rate? I am not sure if it is the half-year-end, which would not make sense, or the September-end rate.
그래서 지금 9월 말 기준 그리고 현재 기준으로 이렇게 금리가 급격하게 변동한 상황에서 손실 계약 블록들에 대한 저희의 평가가 어떻게 될지를 이 바뀐 금리 기준으로 한 번 더 소통해 주시면 저, 추정하는 데 도움이 많이 될 것 같습니다. 그리고 이건 자잘하지만 혹시 저희 기타 사업비 단위, 간접 사업비 단위 좀 금액이 저희 사이즈에 비해 전혀 크진 않지만 그래도 시계열 대비해서 많이 올라온 것 같은데 설명해 주시면 감사하겠습니다. [Foreign language]
Yes, thank you for the opportunity to ask some questions. I would like to ask about your loss-making or onerous contracts, if you could break it down into new policies versus in-force. I would appreciate it. It seems that in last year, the previous year, some of your participating type products experienced some loss and increase in loss-related expense as well. I think there were comments that this year there could be some loss-making contract expense, between KRW 200 billion-KRW 300 billion, depending on interest rates. If you could elaborate more about your view today. I think between then and now the interest rates actually have moved quite abruptly. We have, as we have seen, in September and then even more sharply in October as well.
Based on the changed interest rates as of the end of September and at present, could you take us back in terms of your assessment of the loss-making block, so that we can inform our projections? Also, in terms of other operating expense, while it is not very substantial relative to the size of your business, it seems that compared to the time that has last, it does seem to have grown some more, by more. Could you explain about that as well?
네, 대리팀장 변인철입니다. 답변 드리겠습니다. [Foreign language]
Yes, this is Byun In-cheol from the actuarial team. Let me take this question.
먼저 3분기 그 손실 계약 부분은 저희가 이제 일부 건강보험 상품 판매 확대하면서 실손 관련된 부분하고요. 그다음에 적립형 계약, 그, 이제 저축보험 같은 부분에서 좀 발생한 KRW 20억 정도 발생했고, 그 보유 계약 블록에서는 그 계약 차이에 따라 가지고 한 KRW 2,500억 정도 발생한 것으로, 것입니다. [Foreign language]
In terms of our loss-making policies in the third quarter, first from the new policies, it was about KRW 20 billion, mostly from indemnity type products as we expanded sales of health-related products and also certain savings type insurance products as well. From our in-force or existing block, the loss-making contracts amounted to about KRW 50 billion.
그리고 그 주시, 그 유배당 관련된 상품의 금리 변화에 따른 그 영향은 저희 같은 경우에는 세븐틴 기준서에 따라서 금리, 금융 과정의 변동은 그 OCI로 인식을 하고 있기 때문에 실질적으로 기타 포괄 손익에서 이렇게 조정이 되고, 어, 보험 손익이나 CSM에는 영향이 없다고 이해해 주시면 될 것 같습니다. [Foreign language]
You asked about the impact of changing interest rates to our participating type policies, the part-type block. Pursuant to the guidance of IFRS 17, and the IFRS 17 standards, for those types of changes, we recognize these valuation gain or loss changes as OCI on the balance sheet. It is adjusted for at the AOCI account level, and therefore there is no impact for change to CSM or to our underwriting profits.
따라서 유배당 관련된 그 향후 비용 인식 부분은 전에 말씀드린 수준에서 조금씩 감소할 것으로 이렇게 보고 계시면 될 것 같습니다. 첫 번째에 대한 답변 이상으로 마치겠습니다. [Foreign language]
In terms of future expensing for the part-type policies, I think, starting from the level that we mentioned previously, you can assume that it will go down slightly, gradually from those levels.
이렇게 추가로 질문 주신 그 보험 손익이 기타 항목 변화는 주로 미지급 보험금 때문인데요. 그 자세한 내용은 IR팀에서 따로 연락드려 가지고 좀 더 설명드리도록 하겠습니다. [Foreign language]
You asked about why there was an increase under insurance profit for the other expense category. It mostly is on account of accrued claims that have not been paid. For more details, I think I would appreciate if you would contact us at the IR team.
다음으로 질문해 주실 분은 다올투자증권의 김지원 님입니다. [Foreign language]
The following question will be presented by Kim Ji-won from Daol Investment & Securities. Please go ahead with your question.
has been a slight change in our health insurance new business CSM portion. Now, recently, with the interest rate trends, well, we still need to see how the atmosphere develops, but there is some talk of a few basis points, and if we also take into account the expansionary fiscal policy, it seems possible that long-term interest rates could go up further. Considering this interest rate environment, I honestly feel like the VFA contract discount rate burden has also somewhat eased. So, do you see the health insurance portfolio proportion being maintained at the current level going forward, or is it possible that the proportion of whole life or financial insurance could increase a bit more? Thank you.
Yes, thank you for the opportunity. I will be just asking one question. It seems that recently, as a share of the total mix, your health-related CSM actually has been increasing substantially. But despite the increase to the new business CSM multiple, I think there has been less of a boost to your health protection CSM. It remains to be seen how the interest rates, the movement will play out. When we assume that expansionary fiscal policies may be in the pipeline, there is a possibility that the yields on long-term paper may increase from current levels. Considering this type of interest rate environment, I think maybe the burden from the discount rates actually may be eased some, perhaps regarding your health-related policies. What is the company's plan?
Do you intend to maintain the current mix of health CSM, or will you be increasing perhaps the other categories like savings annuities or whole life?
Dong-hoon, Head of the Channel Marketing team.
Yes, this is Lee Dong-hoon from the channel marketing team. Thank you for your question.
아마도 상분기에 건강 비중이 좀 낮아지다 보니까 질문을 주신 것 같은데요. 어, 건강 상품은 종신보험보다 금리 민감도가 낮아서 금리 인하 등 외부 요인 변동에도 안정적으로 신계약 CSM을 확보할 수 있는 상품입니다.[Foreign language]
I think you were asking the question because in the third quarter, there was a slight decrease in our health CSM just as a percentage of the total. As a category of products compared to whole life, health products actually have lower interest rate sensitivity. Despite the fall in interest rates or other externalities, it is possible to drive stable new business CSM growth.
second quarter. In the third quarter, we launched new death benefit products to diversify our product portfolio. [Foreign language]
Up to the second quarter, most of our new product releases were centered around health-type policies. But in the third quarter, for the purpose of diversifying our product portfolio, we did introduce more death coverage-type products.
in death benefit, which is true to the essence of insurance, it received a positive response in the market and the volume also increased significantly. [Foreign language]
It was actually very well received by the market, and there was a boost in terms of the volume overall. It has a stronger margin profile versus the short-term payment type products. Also, it leverages the strength in death policies as well.
뭐, 구체적으로 건강 사망, 뭐, 비중을 말씀드리긴 좀 어렵겠지만은 4분기 이후에도 고수익 상품 위주의 판매 기조 강화할 수 있도록 하겠습니다. 이상입니다. [Foreign language]
Although it's hard to specify the exact mix between health versus death products overall, into the fourth quarter we will continue to place focus on selling the higher margining, high profitability products.
예, 의원님 충분한 답변이 되셨습니까? [Foreign language]
네, 감사합니다. [Foreign language]
Next question, please.
다음으로 질문해 주실 분은 박혜진 님입니다. [Foreign language]
The following question will be presented by Hye-jin Park from Daishin Securities. Please go ahead with your question.
네, 안녕하세요. 대신 박혜진입니다. 그, 저도 질문 두 가지 있는데요. 어, 즉시연금 관련해가지고 이제 저번에 대법원 판결 결과가 이제 원고 패소가 확정되지 않았습니까? 그래서 저희가 이거를 지금 기타 충당부채로 계상하고 있는 걸로 알고 있는데, 이제 지급 의무가 사실 해소됨에 따라서 좀 회계 처리가 달라져야 될 것 같습니다. 그래서 관련해서 좀 향후 이제 이 회계 처리를 어떻게 하실지, 어, 설명 부탁드리고요. 두 번째는 그 장표 12페이지에 어쨌든 지금 생존담보 쪽 손해율이 계속 올라가고 있습니다. 어, 사측에서는 아까도 이제 뭐 노력을 많이 하시겠다고 말씀을 주셨지만, 어, 궁극적으로 이 생존담보 쪽 손해율이 반전될 수 있을 만한 시기가 언제로 예측을 하시는지, 어, 설명 부탁드리겠습니다. [Foreign language]
I have a question regarding your immediate annuities. The Supreme Court's ruling actually decided against the plaintiff. I understand that currently you are setting aside some contingent liability against that kind of exposure. Pursuant to the court ruling, is there any changes required to your accounting treatment? Second question regarding the living benefit profits on page 12. I do know that you have made various efforts, which you mentioned, for diversifying, also improving the margins. When do you think that it is likely for there to be more of an improvement or rally?
저 편 질문 답변 드리겠습니다. CFO입니다. [Foreign language]
Yes, this is the CFO. Let me take your first question.
지난 10월에 당사 즉시연금 관련해서 소송 건 중에 일부가, 어, 승소 판결이 난 바가 있습니다. [Foreign language]
Regarding our ongoing litigation for immediate annuities, as of October, we did receive some partial judgments in favor.
네, 이번 판결 건이 저희가 지금 즉시연금 관련해서 소송 건이 총 네 건인데, 그중에 한 건에 해당됩니다. 나머지 세 건이 고등법원과 지방법원에 지금 진행 중에 있습니다. [Foreign language]
Currently we have four legal proceedings pending regarding immediate annuities. This partial win actually applies to just one of those four cases. Three cases, or excuse me, two are pending at the appellate high court and one at the district court level.
회계 처리가 굉장히 궁금하신 줄 알고 있는데, 저희가, 어, 나머지 세 건의 소송들의 진행 경과 등을 고려해서, 어, 기업 회계 기준서에 의한 회계 처리 시점과 이익 환입 여부 등을, 어, 결정이 되면 적극적으로 소통을 드리도록 하겠습니다. [Foreign language]
I understand that you are interested in knowing about the accounting treatment with regard to those cases. We will be observing the development of the remaining three pending cases, but we are referring to the corporate accounting standards, and we'll be determining any reversal or write-back of provisioning depending on court decisions and the timing of any reversal. Once it is determined, we will communicate back with you.
안녕하십니까. RM팀장 원창희 상무입니다. 두 번째 질문 답변 드리겠습니다. [Foreign language]
Yes, this is Head of the RM team, Won Chang-hee. Let me take your second question.
질문 주신 것처럼 3분기 손해율 상승 폭이 컸습니다. 어, 당사는 이에 대해서 특이치인 고액 사망 청구가 증가했고, 그다음에 영업일수가 좀, 어, 다른 분기 대비해서 좀 많았으며, 어, 의료 파업 종료 등 다양한 요인들에 따른 영향으로 판단하고 있습니다.[Foreign language]
As you mentioned in your question, it is true that in the third quarter our loss rates actually did increase, by a significant margin. It is due to multiple factors. There were more business days versus other quarters. There was an increase in big ticket, death claims as well. There was the impact from the medical strike.
[Foreign language] the 82-83% level, and as mentioned earlier, we believe that as the health portfolio increases, a certain rise in the loss ratio is inevitable.
We think that the loss rates will come back down to 82% or 83% levels in the fourth quarter. As you suggested, it is true that if we have a bigger portion of health products in our portfolio, inevitably this will mean a slight increase in our loss rates.
[Foreign language] ratio is managed at a certain level, and, additionally, we will work to minimize the increase through measures such as preventing unjust claims. That is all.
That being said, we will continue to make efforts to minimize any increase to loss rates. We will be cracking down against fraudulent claims, for example, and working from the beginning upon sales of any new product to enforce tight management of loss rates within a predefined range.
예, 의원님 충분한 답변이 되셨습니까? [Foreign language]
네, 감사합니다.
take the next question.
다음으로 질문해 주실 분은 한화투자증권의 김도하 님입니다. [Foreign language]
The following question will be presented by Do-ha Kim from Hanwha Investment & Securities. Please go ahead with your question.
[Foreign language] the BEL increases or decreases, I am wondering which point in time's interest rate is used for the evaluation. If it is the end of September, then it is already confirmed, so in that case, for this fourth quarter, just like last year's fourth quarter when the portion converted to block in the PL line was reflected as loss contract burden cost, I am curious whether there could be a reversal or if additional loss could be reflected, and what the expected amount would be. I would appreciate it if you could answer just those two points.
Yes, thank you for the opportunity to ask a, another follow-on question. Again, regarding the par type, owner's block. Obviously at the end of this year you will be doing another valuation or assessment of that block, and this will either lead to an increase or decrease on your balance. So when, what is your underlying assumption in terms of your interest rate for calculating that balance, adjustment? What is the time period that you use for your interest rate assumptions? If it is as of the end of September, then that is already pretty much confirmed and set. I'd like to know what time period interest rate is reflected. Like last year, there can be further loss or perhaps write back from these types of loss-making blocks. What is your expectation, both on the loss or reversal side?
예, 재리투나 변인철입니다. 주신 질문 답변 드리겠습니다.
Yes, this is Byun In-cheol from the actuarial team again. Let me take your question.
예, 지금 당사가 지금 말씀드리는 유배당 연금은 그 2000년 이전에 판매된 고정금리형 상품이기 때문에, 그 시가부채 평가 시에 이제 적용하는 금리는 2021년 말 전환 시점에 3.2%로 확정이 돼 있고요. 이는 시장 금리가 어떻게 변하든 그 벨을 평가하는 데 있어서는 변하지 않습니다.[Foreign language]
You asked about, what time, specific interest rate are we applying in our assumptions. As you know, the par type annuities that we are talking about now are legacy high fixed rate products that were sold prior to 2000. At the time of doing a market fair value valuation, we assumed a set interest rate, as of the end of 2021, which was fixed at 3.2%. Because it is fixed, regardless of any changes to actual market interest rates, the interest rate assumption that we use for calculation of bell remains unchanged.
연말에 이제 그 평가를 다시 하면서 손실이 발생하는 이유는 그 이제 사람들의 이제 생존 수명이 길어지면서 그게 이제 순차적으로 반영되는 부분이고요. 작년보다는 좀 감소한 수준에서 4분기에도, 어, 일정 수준의 어떤 손상은 발생할 것으로 지금 전망하고 있습니다. 이상입니다.[Foreign language]
Upon end of the year revaluation, why is it that we may see a loss? It's mostly due to increased life expectancy of individuals, which is sequentially reflected and kicks in. Although it will be to a lesser extent versus last year, we think that there will be a certain level of impairment booked also in the fourth quarter this year.
예, 김 의원님 충분한 답변이 되셨습니까? [Foreign language]
아, 그럼 저희 작년 사, 이거 너무 무지한 질문이라 죄송해요. 작년 4분기 때 그 기천억 원으로 CSM 깎고 손실 전환된 것들이 금리 때문이 아니라 그 뭐야, 뭐라고 해야 되죠? 수명에 대한 경험 통계 조정 때문이었다고 이해하면 되는 건가요? [Foreign language]
So to clarify, and I apologize for this basic question, but the reason for the loss converting, the block that converted to a loss last year, are you saying that this in fact was not due to the interest rates but due to changed life expectancy or life experience assumptions?
예, 맞습니다.
Yes.
감사합니다.
예, 그 현재 더 이상 질문이 없어서, 어, 이상 실적 발표회는 마치도록 하겠습니다. 추가적인 질문이 있으신 분들은 IR팀으로 연락 주시면은 좀 더 상세히 답변 드리도록 하겠습니다. 감사합니다. [Foreign language]
Yeah, thank you very much. We will now conclude our earnings call. If there are no further questions lined up, with any further questions, please contact us at the IR team. Thank you very much.