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2013. 5
Meritz F&M FY2012 Financial Results & Embedded Value
FY2012 Financial Results & FY2013 Business Forecast
FY2012 Embedded Value
Q & A
FY2012 Financial Results & FY2013 Business Forecast
This material has been prepared based on internally
audited figures and final figures may change due to the results
of an independent audit without notice.
This presentation includes forward-looking statements
regarding the company’s outlook for FY2013 and beyond,
including projected premium and net income. These forecasts
are subject to unknown risks and uncertainties that may cause
actual figures to differ from those stated or implied by such
statements. We have no obligation or responsibility regarding
investment made based on such forward-looking statements.
1. FY2012 Financial Results
2012 Vision The Greatest Insurance Company in Korea
3 Big New Growth Momentum Differentiated Strategy in
Accordance with Market Condition
1
2
3
5
6
+
4
5/43
Great leap in 90th Anniversary
Maintain LT health high margin- focused strategy
Expansion of Auto Insurance
Maintain commercial insurance remodeling
Adopt new sales channel
Regional differentiation growth strategy
Stabilized investment strategy
Major Outcomes
1. Solid Competitiveness in LT Health Insurance
LT Health insurance-focused growth(M-Basket launch, etc) → M/S 12.7% (+0.3%p↑)
Long-term L/R #1 in the industry → 6%p lower than Top 4
4.6bn 4.9bn
3.9bn 4.0bn
5.6bn 10.5%
11.1% 11.6%
12.4% 12.7%
FY2008 FY2009 FY2010 FY2011 FY2012
Monthly Earning Power
M/S
+0.3%p↑
G/R
26% 8% -20% 3% 39%
78.8%
77.5%
79.5% 80.1%
79.7%
82.4% 82.2%
83.2%
85.2% 85.8%
FY2008 FY2009 FY2010 FY2011 FY2012
Meritz Top 4
(K-GAAP 78.8%)
Long-term L/R 79.7%
6/43
2. Secure Growth Momentum by On-line Auto Increase
Growth of auto insurance by on-line channel → M/S 6.4%, improved 0.3%p YoY
Sales 815.6bn(G/R 2.4%), M/S 6.4%(+0.3%p↑)
Online Portfolio 18.5% (+7.2%p↑)
Online P/F
4.7% 6.1% 8.1% 11.3% 18.5%
Sales 151.2bn(G/R 67.3%), M/S 4.2%(+1.5%p↑)
Increase of resources on online channel
FY11 FY12 Growth
# of Call Centers 2 7 +5
# of TMs 258 437 +179
7/69
726.7bn 692.2bn
776.8bn 796.4bn 815.6bn
6.6% 6.2% 6.3% 6.1%
6.4%
FY2008 FY2009 FY2010 FY2011 FY2012
Sales
M/S
34.3bn 42.5bn 63bn
90.4bn
151.2bn
1.1% 1.8%
2.3% 2.8%
4.2%
FY2008 FY2009 FY2010 FY2011 FY2012
Sales M/S
3. Improvement of Commercial Insurance
→ Transit to Earnings Growth Model
FY12 higher growth in the market, turn-around to evident growth model
U/W profit margin improvement by remodeling and profit-focused U/W
U/W Margin beyond 2nd tier
FY2009 FY2010 FY2011 FY2012
39.4% 37.6% 36.3% 37.8%
50.3%
45.3%
34.4% 32.4%
Meritz 2nd Tier
* Profit Margin : U/W Profit / Earned Premium
0.6%
-6.9% -10.7%
11.2% 8.0% 6.9%
12.0%
8.7%
Meritz G/R Industry G/R
M/S 7.8% 6.8% 5.4% 5.5%
Rapid Growth
※ FY2012: As of 2013. 2
8/69
321.9bn 299.7bn
267.7bn 297.7bn
FY2009 FY2010 FY2011 FY2012 • U/W Profit = Earned P – Losses – Sales expense(excluding general administrative cost)
4. Recruitment of New Sales Channel & Active Personnel Increase
Best recruit achievement
→ Monthly Avg. new recruitment +116(69%↑) YoY, Active Personnel over 8,000
FY2009 FY2010 FY2011 FY2012
335 327 372
488
Highest Recruitment
→ Qualified M/S 11.1% (+1.8%p YoY)
+116↑
9.0% 9.5% 9.3%
11.1%
Qualifed M/S
FY2009 FY2010 FY2011 FY2012
6,200 6,361 6,586
8,137
Active Personnel over 8,000
→ Rapid Increase of Elite Personnel Ratio
+1,551↑
Elite Personnel
Ratio
40.2% 42.4% 43.0%
58.7%
9/69
5. Expand Base Focused on Core Regions
Branches
LT Health
Capital Area
Chungcheong
Bugyeong
Daegyeong
Honam
Gangwon
Jeju
87→ 102(+15)
7.8 → 9.8 8 → 8(0)
6.0 → 7.4
29 → 30(+1)
12.7 → 15.4
45 → 56(+8)
13.8 → 17.5
6 → 6(0)
31.8 → 38.3
28 → 29(+1)
12.8 → 14.9
24 → 25(+1)
11.1 → 13.5
(Unit : %, Branches)
* FY11 → As of FY12.12
Secure competitiveness by expansion in core region(capital area) → 256 branches, up 26 branches YoY
Regional marketing reinforcement, LT Health M/S improvement in core region : 12.7%, up 2.6%p YoY
10/69
6. Invested Asset Portfolio :Focus on fixed income assets
Total assets 10.1trn, Invested assets 8.0trn
80.2% mix of Fixed income assets
(KRW Bn) 2011. 3 2012. 3 2013. 3
Mix Mix Mix G/R Profit Yield
Fixed-income asset
3,888.5 72.4% 5,034.3 75.8% 6,411.5 80.2% 27.4% 322.3 5.8%
Performance-based asset
305.9 5.7% 283.7 4.3% 494.2 6.2% 74.2% 20.1 5.3%
Stock-type asset
413.8 7.7% 547.7 8.2% 235.7 2.9% -57.0% 10.7 2.8%
Other 39.2 0.7% 18.9 0.3% 27.4 0.3% 45.0% -7.4 -27.6%
Freely invested Assets
4,647.5 86.6% 5,884.6 88.6% 7,168.7 89.7% 21.8% 345.8 5.4%
Equity-method
& real estate 720.0 13.4% 757.6 11.4% 827.0 10.3% 9.2% -2.5 -0.3%
Total investment asset
5,367.5 100% 6,642.2 100% 7,995.8 100% 20.4% 343.3 4.8%
Total Asset 6,973.9 - 8,654.5 - 10,158.4 - 17.4% - -
11/69
Note) Fixed income = deposit, AFS bond, overseas bond, loan / performance based = trading bond, alternative investment / Stock = outsourced investment, trading stock, stock-type AI / Other = Non-operating deposit, Property management fees
Rapid growth of LT Health which has high future profitability : 67.4bn(11.4bn↑ compared to plan)
→ Future value of LT 376.9bn, Future value of LT Health 315.9bn
Built infra for increasing future value : Organization/regions expansion, displayed value increase
FY2012 LT NBV 376.9bn(e), G/R 37%
Conclusion :
FY2012, Expansion of future value & Strengthened Value Creation Capability
+102.5bn (37.3%↑)
LT Health New Biz.
Future Total Prm. Income
New Biz. Value
674억
3,208bn
315.9bn Multiple 47.6x
Profit Margin 9.8%
Large new recruitment
Active personnel – 8,000
90th anniversary events, advertisement
Customer Satisfaction Hall of Fame
→ Brand awareness ↑
Head Branch : 1 Foundation
Branch : 14 Foundation,
13 Partition
376.9bn
84%(e) of NBV
12/69
FY2008 FY2009 FY2010 FY2011 FY2012
184.9bn
229.9bn 233.9bn
274.4bn
Plan Report profit Actual profit
-24.3bn
-51.6bn
+11.6bn
Report Net Profit : 130.7bn → due to external influence : △24.3bn (38% of Gap btw Plan & Actual)
195bn
P&L increase
External influence
Strategic decision
Excluding △75.9bn (external / strategical influence)
․ Alternation in valuation method of beneficiary certificates △25.1
․ Retirement benefit actuarial P&L △6.9bn
․ Pre-payment of selling expense (additional amortization △68.1bn)
130.7bn
Actual profit 206.6bn
13/69
2013.3 RBC Ratio 183.1% → Main factor : regulation change (△62%p)
RBC Ratio : 16%p ↓ for Last 2 Years by Changed Regulation, etc
2013.3 2011.3
199% 183%
+46.4%p -62.2%p
Earned surplus ↑ - RBC regulation change - Adopted IFRS - Cost of Business & System Renovation
14/69
Overview
(Unit: KRW Bn) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
Direct premium 2,534.0 2,896.4 3,288.0 3,836.1 4,254.3 4,780.4
U/W Profit -77.2 -1,86.4 -16.4 -95.8 -47.8 -160.9
Combined Ratio 102.8% 108.7% 100.1% 102.4% 101.2% 103.6%
L/R 78.9% 82.5% 75.4% 79.3% 80.4% 80.6%
E/R 23.9% 26.2% 24.7% 23.1% 20.8% 23.0%
Net investment profit
179.2 106.2 207.6 257.0 268.6 343.3
Investment Yield 5.6% 2.8% 4.9% 5.3% 4.6% 4.8%
Net Profit 71.1 -58.8 140.4 120.9 164.6 130.7
ROE 18.6% -16.1% 26.2% 18.7% 20.8% 13.2%
Solvency Ratio
(RBC Ration)
- (235.8%)
- (189.9%)
269.7% (230.9%)
198.9% (162.9%)
176.1% -
183.1%
-
15/69
Note) FY2008 Unusual factors: RG loss -181.7bn / bad investments write-off -60.2bn / additional DAC amortization -30.2bn
2. FY2013 Business Forecast
FY2013 Business Environment Forecast
Growth rate decrease
Prolonged low interest
RBS, RAAS improvement
Strict supervision of sales channel
Reinforcement of consumer protection
Slow growth due to base effect
Competitive On-line auto
Competitive LT Health
Medical expense regulation
Installment of sales commission
Engagement of costumer protection law
17/69
Shrinking consumption
FY2013 Strategery
25.4bn↑YoY
Recover RBC ratio of 200%
※ FY 2013 is 2013.4~12 (9months) due to change in Insurance Business Act
18/69
4 Tactics
01 02
03 04
01. Internal stability growth
Continue LT Health growth (reinforce base for retention ratio, continuous prem.)
Expansion of auto insurance (Online, offline growth)
Core business focused commercial insurance growth
Sustain core region competiveness
02. Efficiency/Retrenchment
03. Optimization of asset
management
04. Risk management
reinforcement
Sustain expense retrenchment
Sales expense balance, efficiency reinforcement
Enhance Auto insurance efficiency (Improve C/R, indemnity innovation, exit strategy)
Branch & elite channel reinforcement,
Invest on new low-risk profit source
Defend against low interest risk with ALM focused asset management
Consumer protection risk reinforcement (Civil petitions, customer info. protection, etc)
Preemptive risk control
Emphasize on communication & responsibility
Efficient management of expanded capitals
Enhance individual info. protection
19/69
Maximizing
Profit
FY2013 Management Targets
FY2012.12 FY2013 Target
104.6bn
+25.4 bn
(G/R 24.2%)
FY2012.12 FY2013 Target
103.4%
△1.1%p
55.5bn capital increase reflected
FY2012.12 FY2013 Target
14.6%
+0.3%p
20/69
※ FY 2013 is 2013.4~12 (9months) due to change in Insurance Business Act
Divisional Business Plan
LT Insurance : Sustain LT Health growth strategy & improve profitability
Sales Vs. Sales expense balance : LT Health sales 44.8bn (△4.9bn YoY) → Sales expense ratio 14.2% (△1.8%p YoY)
C/R 101.1% (△1.3%p YoY)
Stabilizing sales E/R with adequate sales
Sustain LT Health
Growth
U/W P&L
Stabilization
Sales↔Sales Expense Balance
Interest Rate Risk
Management
FY2012 FY2013 Growth
Sales
LT Health (M/S)
49.7bn (14.3%)
44.8bn (13.1%)
-4.9bn (-1.2%p)
New contract (M/S)
66.8bn (7.9%)
64.4bn (8.0%)
-2.4bn (+0.1%p)
Sales E/R 16.0% 14.2% -1.8%p
Additional depreciation
68.1bn 12.3bn -55.8bn
E/R 22.6% 21.4 % -1.2%p
L/R 79.8% 79.7% -0.1%p
Risk L/R 84.0% 83.5% -0.5%p
C/R 102.4% 101.1% -1.3%p
Switch to growth after 2Q due to regulation revision
Stabilize commission allocation
Exclusive channel portfolio improvement
Pricing strategy in accordance with market environment
1
※ FY2012: As of 2012. 12 / New Contract : Monthly Equivalent Prem standard
21/69
Auto Insurance : Sustain Expansion Stance
Competitiveness focused on exclusive channel(Branches+Online)
→ Sustain online-focused growth
Secure M/S of 7% → Online 5.9% (+1.0%p)
2
AG
45.5%
Online
17.1%
Branch
37.4%
[FY2012]
AG
39.6%
Online
26.1%
Branch
34.3%
[FY2013]
Exclusive channel(Online+Branches) Portfolio Expansion
: FY12 54.5% → FY13 60.4%
Increase online resource investment
FY2012 FY2013 Growth
# of Centers 7 9 +2
# of TMs 437 546 +109
43.4bn 66.4bn 106.2bn
176bn
584.7bn 606.3bn 622.7bn
673.7bn
2.1% 2.7%
4.9% 5.9% 6.4%
6.2%
6.4% 7.0%
FY10 FY11 FY12 FY13 Target
Online Total Online M/S Total M/S
FY2012 FY2013 Growth
L/R 85.6% 84.8% -0.8%p
E/R 24.8% 24.4% -0.4%p
C/R 110.4% 109.2% -1.2%p
※ FY2012: As of 2012. 12 ※ Sales, M/S : As of Dec. of each year
22/69
Auto Insurance : Improve Business Efficiency
Arrange virtuous cycle of business efficiency by reducing C/R by 1.2%p(min.)
- Reducing C/R gap b/w 2nd tier → Secure scale merit
→ Reduce expense, claim survey fee
77.3 76.4
8.3 8.4
10.4 9.6
14.4 14.8
일반경비
판매비
손해조사비
손해율
FY2012 FY2013
109.2% 110.4%
Target : reducing C/R by 1.2%(min.)
L/R △0.9%p↓
⇒ Improve business efficiency with
‘total directional L/R management’
Exclusive channel (Online+Branches)
portfolio Expansion
: FY12 54.5% → FY13 60.4%
- Supply branch-specialized product
Indemnification efficiency
- Optimizing emergency service
- Improve management process for hospital &
repair shop
Enhance risk management (heavy snow, etc)
- Control P&L variability by reforming X/L
program
2
※ L/R : Based on K-GAPP
23/69
General Expense
Sales Expense
Survey Fee
L/R
Commercial Insurance : Core Business Growth Based on Remodeling
Sales 252.5bn (+23.3bn YoY, G/R 10.2%, M/S 5.6%)
Net premium written 111.3bn (G/R 11.6%)
3
FY2012 FY2013 G/R
Sales 229.2bn 252.5bn +10.2%
M/S 5.5% 5.6% +0.1%p
L/R 54.5% 63.6% +9.1%p
E/R 33.4% 33.9% +0.5%p
C/R 87.9% 97.6% +8.4%p
Remodeling stabilization → Higher G/R than the market
Maintain 2 digits G/R (G/R 10.2)
Sustain retention growth
Net premium written
G/R 11.6% (+11.5bn)
Minimizing P&L variability by huge losses
Total analysis on huge losses ※ Based recent 5y L/R & remodeling effect
(Rare low L/R until FY2012. 12)
※ FY2012: As of 2012. 12
24/69
Investment Profit : Focus on Risk Management & New profit Source under Low Interest
4
Target Profit : 273.6bn(min.) +15.3bn↑, G/R 5.9% YoY
Investment yield 4.3% (△0.6%p)
- Focus on fixed income assets & maintain LT Duration 85%
FY2012 FY2013 Target
10.7%
13.2%
76.1%
etc
Performance Based Assets
Fixed Income Assets
9.3%
12.8%
77.9%
7,671.2bn
9,114.3bn
New investment
+139.2bn
+1,443.1bn
[Portfolio] [Investment Profit]
※ ( ) :Investment yield
(4.9%)
258.3bn
273.6bn
(4.3%)
+15.3bn (△0.6%p)
FY2012 FY2013 Target
Maintain 85% matching
ratio for LT Duration
Chance of business recovery in 2H
Flexibility b/w LT investment for dividend
& time-trading
Invest on overseas
structured securities
Increased invest on
KP-focused
structured product
※ FY2012: As of 2012. 12
25/69
23.2% (779.3bn)
FY2012 FY2013
9.1% (335.4bn)
14.6% (489.8bn)
8.6% (289.5bn)
Sales E/R
General E/R
22.3% (816.1bn)
△ 1.5%p↓ (△ 9.1bn)
+0.5%p↑ (+45.9bn)
△ 1.0%p↓ (+36.8bn)
13.1% (480.7bn)
Expense Ratio : Efficiently Execute Expenses
FY2012
289.5bn
BRS stabilization Regional differentiation strategy Continuous on-Line business
8.6%
FY2013
335.4bn
9.1% General E/R
General Administrative
Costs
Labor Costs
114.8bn
174.7bn
137.7bn
197.7bn
Net Operation E/R
+45.9bn
0.5%p↑
+22.9bn
+23bn
E/R 22.3% : Sales E/R △1.5%p↓ YoY, General E/R +0.4%p ↑ YoY
Enhancing profitability based on effective expense
- Minimize unnecessary new business, invest on core business
5
※ FY2012: As of 2012. 12
26/69
Settlement of Recruited Sales Channel
Increase settlement ratio & settlement of 2012 recruits
95.0
76.0
54.0
38.0
263.0
2nd 4th 7th 13th Total Month
(Unit: %, %P)
2.4 5.1 4.0 3.6 15.1 YoY
2,162 1,941 2,080
3,263
987 939 961
정착대상 정착인원
FY2010 FY2011 FY2012 FY2013
45.7
48.4
46.2
[13th month S/R, No. of Settled]
Increase S/R by 3%
100 more settled recruits
Focus on settlement of new recruits, due
to slow growth of the market in 2013
Combined settlement ratio
: 263.0% (min.) / 15.1%p↑
S/R
Selective introduction, training center reinforcement, strict evaluation
6
27/69
# of Subject
# of Settled
FY2013 Business Plan Summary
Sales Plan (Profit & Loss)
(KRW Bn)
FY2013
YoY
Loss ratio
Long-term 79.7% -0.1%p
(Risk) 83.5% -0.5%p
Auto 84.8% -0.8%p
Commercial 63.6% +9.1%p
Total 80.1% -
Expense ratio 22.3% -1.0%p
Combined ratio 102.3% -1.0%p
Investme
nt
Investment
profits 273.6 +5.9%
(Yield) 4.3% -0.6%p
Net Profits 130.0 +24.2%
ROE 14.9% +0.3%p
(KRW Bn) FY2013
G/R M/S Difference
Long-
term
Initial Premium
(monthly equivalent) 64.4 -3.7% 8.0% +0.1%p
Protection 47.3 -8.2% 11.1% -0.6%p
(Health) 44.8 -9.9% 13.1% -1.2%p
Savings 17.1 11.4% 4.5% +0.8%p
Initial Premium 78.8 -8.4% 6.2% -
Continuous Prem 2,892.8 12.9% 9.0% +0.2%p
Sub total 2,971.6 12.2% 8.9% +0.2%p
Auto
Off-line 497.7 -3.6% 7.4% +0.2%p
On-line 176.0 65.6% 5.9% +1.0%p
Sub total 673.7 8.2% 7.0% +0.5%p
Commercial 252.5 10.2% 5.6% +0.1%p
One-time payment 27.0 -67.1%
Total 3,924.9 9.6% 8.2% +0.3%p
28/69
Note) New Monthly Equivalent Premium : Excludes One-time payment and Annuity / New Premium: Includes Annuity, but excludes one-time payment
FY2013 Business Plan Summary
Balance Sheet
(KRW Bn) FY2013
YoY
Assets
Invested assets 9,114.3 18.8%
Non-invested assets 2,015.1 3.9%
Total 11,129.4 12.6%
Liability
Policy reserve 9,444.9 15.8%
Other liability 441.7 0.2%
Total 9,886.6 11.4%
Total
Shareholder’s
Equity
Capital stock 51.6 6.8%
Capital surplus 313.5 20.0%
Retained earnings 426.8 34.0%
Cat reserve 167.2 9.6%
Capital Adjustment 6.0 -
Other comprehensive
income 444.8 17.1%
Total 1,242.8 22.5%
※ FY2013 YoY : As of 2012. 12
29/69
Beyond Great Leap in 90th anniversary,
“Top Insurer”& “Leading Financial Company”
Sales exceed 4trn
Improve profit strength
Lead the market with
differentiated strategy
(LT Health, core regions, etc)
Prepare groundwork for
growth
Great leap in 90th anniversary
FY2013
~
100th Anniversary FY2012
FY2011
LT Health M/S exceed 13%산 10조원 돌파
The recordable recruitment
Secure 2nd tier level LT Health M/S
Secure economies of scale for auto insurance
Maintain RBC ratio 200%, ROE 15%(min.)
“Countdown 100years”
Switch to a holding
company system
Acknowledgement of
Meritz’s potentials
Best LT Health competiveness in the market
Improve future value
Secure riskless constitution with management stability
Best auto insurance company
→ Best profitability, growth, stability in
the industry
Long Term Business Plan 30/69
(Unit : KRW Bn) CY2013 CY2014 CY2015
YoY Yoy
Direct Premium 5,123.8 5,715.1 11.3% 6,244.9 9.3%
Combined Ratio 102.8% 102.0% -0.8%p 1,01.1% -0.9%p
L/R 80.6% 79.9% -0.7%p 79.6% -0.3%p
E/R 22.2% 22.1% -0.1%p 21.5% -0.6%p
Net Profit 155.8 194.8 23.7% 236.3 21.3%
Total Assets 11,273.9 12,693.1 12.6% 14,024.7 10.5%
Total
Invested
Assets
9,258.8 10,662.0 15.2% 11,945.6 12.0%
※ CY : Jan. ~ Dec.
3 Year Forecast 31/69
FY2012 Embedded Value
Certain of the statements contained herein are statements of future
expectations and other forward looking statements that are based on
management's current view and assumptions and involve known and unknown
risks and uncertainties. In addition, expressions and words which are forward-
looking by reason of context identify forward-looking statements. Actual results,
performance or events may differ materially from those in such statements due to
general economic conditions, performance of financial markets, the frequency
and severity of insured loss events, mortality and morbidity levels and trends,
persistency levels, interest rate levels, general competitive factors, changes in
laws and regulations, changes in the policies of governments and/or regulatory
authorities. Although the embedded value and value of new business results
presented in this document are based on a traditional embedded value
methodology calculated on a deterministic basis, alternative valuation
methodologies and approaches to calculate these results have emerged. Meritz
Insurance assumes no obligation to update any forward-looking information
contained in this report. We also have no obligation or responsibility to
investment made based on such forward looking statements.
Disclaimer
Contents
Ⅵ. Review Statement
Ⅰ. Embedded Value
Ⅱ. Value of New Business (VNB)
Ⅲ. Movement of EV
Ⅳ. P/EV
Ⅴ. Sensitivities
35
Ⅰ. Embedded Value
1. Embedded Value results
2. Adjusted Net Worth (ANW)
3. Value of in-force business (VIB)
4. RoEV
Ⅰ- 1. Embedded Value results
▶ FY2012 Embedded Value : 2,490.2 bn (increased by 336.2 bill (15.6%) from FY11)
Value of in-force business
Adjusted Net Worth
Embedded Value
1,316.6
837.4 159.2
19.0% ↑
336.2 15.6% ↑ 2,154.0
177.0 13.4% ↑
639.3
1,041.7
FY2011 FY2010
1,681.0
1,493.6
996.6
2,490.2
FY2012
198.1 31.0% ↑
473.0 28.1% ↑
274.9 26.4% ↑
36/69
Unit : KRW bn
Ⅰ- 2. Adjusted Net Worth (ANW)
▶ FY2012 ANW : 996.6 bn (increased by 159.2 KRW bn (19.0%) from FY11)
37/69
130.7
-53.2
-25.7
104.9
2.5
Unit : KRW bn
FY2012
837.4
Net
Income
Dividend
Gain from
valuation of AFS
996.6
FY2011
Intangible
Asset Other
Ⅰ- 2. Adjusted Net Worth (ANW)
▶ FY2012 ANW
Category FY2012
(A)
FY2011
(B)
YoY
(A-B) Note
Shareholder’s
Equity (a) 1,086.7 899.0 187.7
•Net Income : +130.7
•Gain from valuation of AFW : 104.9
•Dividend : -53.2
•Intangible Asset : -25.7
※ Declared dividend of 29.0 is included
-90.1 -61.6 -28.5
Allowance for Bad Debt 5.6 7.2 -1.6
Intangible Asset -90.8 -65.1 -25.7
Prepaid Expense -4.9 -3.7 -1.3
Adjusted Net Worth (a+b) 996.6 837.4 159.2
Adjusted Capital (b)
38/69
Unit : KRW bn
Ⅰ- 3. Value of in-force business - Assumptions
▶ Operational Assumption
39/69
Lapse - Based on experience analysis of 3 years’ data by product type and channel
Loss Ratio (L/R) - Analyze past 6 years’ data by 17 benefit categories
- Inforce Business’s PV L/R : FY2011 86.8% , FY2012 84.7%
Expense
- Commission : Applied Meritz’s payment schedule
- Expense cost excluding commission : Experience study on one year’s
experience data
Crediting Rates
- Separately applied for traditional /ISP
→ Crediting rates for ISP are applied by interest type
(declared rates., policy loan , etc)
Ⅰ- 3. Value of in-force business - Assumptions
▶ Economic Assumption
40/69
□ Investment return : 4.10% (FY11 - 4.85%)
(Unit : %) FY2010 FY2011 FY2012
Investment return 5.6 5.6 5.7
Crediting rate 4.3 4.2 4.1
Spread 1.3 1.4 1.6
Govt Bond (3 yrs)* 3.6 3.5 3.0
- Recent 3 years’ spread used for EV - Recent 3 years’ investment experience
(Unit : %) FY2010 FY2011 FY2012
Investment
return 5.0 4.85 4.1
Crediting rate 4.24 4.11 3.62
Spread 0.76 0.74 0.48
■ Meritz’s investment return – actual experience in the spread increased by 20bp from last year,
but taking into account the current low yielding environment , this year’s investment return and
crediting rate decreased by 75bps and by 26 bps respectively from last year.
* Govt Bond (3 yrs): 1 year average preceding to valuation date
Ⅰ- 3. Value of in-force business - Assumptions
▶ Economic Assumption
□ Cost of Capital (Required Capital) : Based on RBC requirement x 150%
※ RBC required capital changes
41/69
Long-term insurance
price risk Mar 2012 Mar 2013
Category Product type Benefit type
Confidence level 95% 99%
Risk factor 26.6% 30.0%
Change 27.7 KRW bn
○ Long-term insurance price risk
Formula
(Investment return – crediting rate) * 0.5
Investment return : 5 yr govt bond’s average
over the last year
+ risk spread (5 yr average)
Change 4.6 KRW bn (Mar 2013)
○ Interest risk negative spread
□ Risk Discount Rate): 10.0% (FY11- 11.0%)
□ Inflation Rate : 3.0%, Tax : 24.2%
Type FY2010 FY2011 FY2012 Remark
Risk Free Rate (govt bond) 4.8 3.6 2.8 Continuous market interest rate
trend is reflected. RDR 11.5% 11.0% 10.0%
* Risk Free Rate (govt bond): as at the end of valuation year
Ⅰ- 3. Value of in-force business (VIB)
▶ VIB = Present Value of Future Profit – Cost of Capital = 1,493.6 KRW bn
Category FY2012 FY2011 YoY
PV of Future Premium (a) 16,437.6 13,851.1 2,586.5 18.7%
PV of Future Profit (b) 1,831.0 1,542.9 288.0 18.7%
Margin (b/a) 11.1% 11.1% +0.0%p
Cost of Capital (c) 337.4 226.3 111.0 49.1%
(c/a) 2.1% 1.6% +0.4%p
Value of In-force Business (d = b - c)
1,493.6 1,316.6 177.0 13.4%
Value Margin (d/a) 9.1% 9.5% -0.4%p
42/69
Unit : KRW bn
Ⅰ- 3. Value of in-force business (VIB)
▶ VIF comparison before and after economic assumption and RBC regulation changes
264.5
1,493.6
1,697.4
-129.5
Current
(after
changes)
68.8
43/69
Unit : KRW bn
Before changes
Investment
return
RDR
Change in
RBC policy
□ Changes in VIF due to economic assumption
and RBC regulation changes
○ Decrease
- A decrease in investment return and spread
: - 264.5 KRW bn
- RBC regulation impact : -68.8 KRW bn
○ Increase
- lowered RDR : +129.5 KRW bn
□ Comparison before and after assumption changes
Category Current Before changes
VIB 1,493.6 1,697.4
YoY 13.4% 28.9%
Unit : KRW bn
▶ RoEV
31.3% 8.4%p ↓
Ⅰ- 4. RoEV
※ EV : Adjusted EV at BOP
FY2010 FY2011
EV(KRW bn) 1,610.0 1,706.9
△EV(KRW bn) 503.6 390.4
FY2012
2,147.7
395.7
22.9% 18.4%
4.5%p ↓
44/69
Ⅱ. Value of New Business (VNB)
Ⅱ. Value of new business (VNB)
▶ Value of 1-year new business : 376.9 KRW bn
Category FY2012 FY2011 YoY
PV of Future Premium (a) 4,775.5 3,776.5 999.0 26.5%
Annualized Premiums equivalent
(b) 1,294.9 1,151.8 143.1 12.3%
PV of Future Profit (c) 439.9 319.4 120.5 37.7%
Margin (c/a) 9.2% 8.5% +0.7%p
Cost of Capital 63.0 45.0 18.0 40.1%
Value of 1-year New Business (d) 376.9 274.4 102.5 37.3%
Profit Margin (d/a) 7.9% 7.3% 0.6%p
Profit Margin on ANP (d/b) 29.1% 23.8% +5.3%p
※ ANP : Annualized premiums equivalent
46/69
Unit : KRW bn
Ⅱ. Value of new business (VNB)
▶ Value of 1-year new business variance
47/69
Category FY2011
Variance
FY2012 Sales
effect
Persistency
rate Loss ratio Expense
Economic
assumption Others
Cumulative Value 274.4 364.4 381.6 434.4 402.7 371.3 376.9 376.9
% - 32.8% 39.1% 58.3% 46.7% 35.3% 37.3% 37.3%
Change Value - 90.0 17.2 52.8 -31.7 -31.4 5.6 102.5
% - 32.8% 6.3% 19.2% -11.6% -11.4% 2.0% 37.3%
※ Sales effect : sales increase/Product Mix, Economic assumption : Discount rate/investment return/Cost of capital, Others : Dividend/Tax
274.4
90.0 17.2
52.8 -31.7 -31.4
5.6 376.9
FY2012 FY2011
Sales effect
Persistency rate Loss ratio
Expense Economic
assumption
Others
Unit : KRW bn
48
Ⅲ. Movement of EV
Ⅲ. Movement of EV
Value of
New Business
FY2011 FY2012
2,154.0
102.4
2,147.7
Adjusted EV
at BOP
-46.7
376.9
14.6
General
Account
investment
Income -98.8
-10.1
-6.3
Model
Change
-208.1
Economic
Assumption
Change RBC
& Tax
(in-force)
18.4
Discount
Unwinding
(new biz)
188.9
Discount
Unwinding
(in-force)
▶ 2,490.2 KRW bn, increased by 336.2 KRW bn
28.4 2,490.2
-109.9
Variances
Changes in NAV
- Dividend : -532 KRW bn
- AOCI: 1,101 KRW bn
- Adjusted Capital : -285 KRW bn
86.5
RDR
49/69
Unit : KRW bn
Operational
Assumption
Change
P&C
Operating
Profit
Change in
Net Asset
Value
Non
operating
profit
50
Ⅳ. P/EV
Ⅳ. P/EV
▶ Stock price, EVPS (EV per share), P/EV
FY2010 FY2011
P/EV
W 12,500
W 19,825
Current (2013.5.22
)
W12,350
W 24,575 0.50x
0.63x 0.58x
W 12,900
W 22,275
51/69
EVPS Stock Price Stock Price Stock Price EVPS EVPS
52
Ⅴ. Sensitivities
Ⅴ. Sensitivities ( In-force business )
-10%
+10%
-10%
+10%
-10%
+10%
+50bp
-50bp
75.0(5%)
-70.4(-5%)
61.2 (4%)
-61.1(-4%)
181.5 (12%)
-196.8 (-13%)
287.0(19%)
-281.2 (-19%)
53/69
Interest※※ Loss ratio
Lapse Expense※
※ Expense sensitivity does not apply to commission and other expenses.
※※ Interest sensitivity includes changes in crediting rate.
Unit : KRW bn
Ⅴ. Sensitivities ( New Business )
-10%
+10%
-10%
+10%
-10%
+10%
+50bp
-50bp
26.4(7%)
-24.6(-7%)
27.9 (7%)
-27.9 (-7%)
26.6 (7%)
-34.6 (-9%)
62.7 (17%)
-62.6 (-17%)
54/69
Unit : KRW bn
Interest※※ Loss ratio
Lapse Expense※
※ Expense sensitivity does not apply to commission and other expenses.
※※ Interest sensitivity includes changes in crediting rate.
Ⅴ. Sensitivities ( Others )
Category Risk Discount Rate
9.0% 10.0% 11.0%
Adjusted Net Worth 996.6
Shareholder’s Equity 1,086.7
Adjusted Capital -90.1
Value of In-force Business 1,640.4 1.493.6 1,364.1
PV of future profit 1,953.4 1,831.0 1,721.8
Cost of Capital 312.9 337.4 357.7
Embedded Value 2,637.0 2,490.2 2,360.7
Value of 1-year New Business 412.0 376.9 345.8
PV of future profit 471.1 439.9 412.0
Cost of Capital 59.0 63.0 66.2
55/69
Unit : KRW bn
56
Ⅵ. Review Statement
Ⅵ. Review Statement - Towers Watson 57/69
Towers Watson has reviewed the methodology and assumptions used to determine the results of Meritz’s Embedded Value as at 31 March 2013 and the value of new business written in the twelve months to 31 March 2013 for the long-term insurance business.
Towers Watson has concluded that:
The methodology used is consistent with recent industry practice for traditional deterministic embedded value reporting in Korea. In particular the values have been based on a deterministic projection of future profits, with allowance for risk through the use of a risk discount rate specified by Meritz and an explicit adjustment for the cost of holding an amount of solvency capital. While this is in line with recent industry practice as regards traditional deterministic embedded value calculations, this may not correspond to a capital markets valuation of such risk (so called “market consistent valuation”);
The operating assumptions have been set with appropriate regard to past, current and expected future experience; and
The economic assumptions used have made allowance for the company's current and expected future asset mix and investment strategy and are internally consistent.
Towers Watson has reviewed the results of the calculations made by Meritz, given the methodology and assumptions set out in this document, by undertaking a number of high-level checks of the models, processes and model outputs, and has confirmed that any issues discovered do not have a material impact on the disclosed embedded value as at 31 March 2013 or the disclosed value of new business written in the twelve months to 31 March 2013 for the long-term insurance business.
In arriving at these conclusions, Towers Watson relied on data and information provided by Meritz. This opinion is made solely to Meritz in accordance with the terms of Towers Watson's engagement letter. To the fullest extent permitted by applicable law, Towers Watson does not accept or assume any responsibility, duty of care or liability to anyone other than Meritz for or in connection with its review work, the opinions it has formed, or for any statement set forth in this opinion.
※ Appendix
- FY2012 Financial Results
Appendix : Sales
(KRW BN) FY2012 FY2011 FY2010 FY2009
Mix G/R Mix G/R Mix G/R G/R
Commercial 297.7 6.2% 11.0% 267.7 6.3% -10.7% 299.7 7.8% -6.9% 321.9 0.6%
Auto 815.6 17.1% 2.5% 796.4 18.7% 2.6% 776.2 20.2% 12.2% 691.8 -4.8%
Long-term 3,579.6 74.9% 14.4% 3,128.7 73.5% 16.6% 2,683.7 70.0% 19.2% 2,252.0 22.1%
New 109.2 2.3% 12.8% 96.8 2.3% 16.8% 82.9 2.2% -6.7% 88.9 17.7%
Recurring 3,470.4 72.6% 14.5% 3,031.8 71.3% 16.6% 2,600.8 67.8% 20.2% 2,163.1 22.3%
One-time pymt 87.4 1.8% 41.9% 61.6 1.4% -19.5% 76.5 2.0% 242.9% 22.3 298.2%
Total 4,780.4 100% 12.4% 4,254.3 100% 10.9% 3,836.1 100% 16.7% 3,288.0 13.5%
M / S FY2012 FY2011 FY2010 FY2009
G/R G/R G/R G/R
Commercial 5.5% 0.0%p 5.5% -1.3%p 6.9% -0.9%p 7.8% -0.6%p
Auto 6.4% 0.3%p 6.1% -0.2%p 6.3% 0.1%p 6.2% -0.4%p
Long-term 8.7% -0.1%p 8.8% -0.2%p 9.0% -0.1%p 9.1% -0.2%p
New 5.8% -1.0%p 6.8% -1.1%p 7.8% -1.3%p 9.1% -0.4%p
Recurring 8.8% -0.1%p 8.9% -0.2%p 9.1% 0.0%p 9.1% -0.1%p
One-time pymt 5.3% 2.9%p 2.4% -7.2%p 9.6% 1.3%p 8.3% 4.8%p
Total 7.8% 0.2%p 7.6% -0.5%p 8.1% 0.0%p 8.1% -0.2%p
59/69
Appendix : Loss Ratio
(KRW Bn) FY2012 FY2011 FY2010 FY2009
G/R G/R G/R G/R
Com -
mercial
Losses 86.0 11.7% 77.0 -22.3% 88.4 74.7% 50.6 -81.1%
Earned prem 119.6 0.5% 119.0 -6.3% 127.0 -3.1% 131.1 -7.0%
Loss ratio
( w/o RG) 71.9% 7.1%p 64.8% -4.9%p 69.7% 10.4%p
59.3%
(38.6%)
-1.8%p (-151.3%p)
Auto
Losses 653.1 1.2% 645.1 8.7% 545.7 5.1% 519.0 10.4%
Earned prem 7,55.2 -1.7% 768.5 13.1% 679.5 -1.1% 687.2 2.1%
Loss ratio 86.5% 2.6%p 83.9% -3.6%p 80.3% 4.8%p 75.5% 5.6%p
Long-
term
Losses 2,888.8 14.4% 2,524.2 15.6% 2,161.6 25.2% 1,727.2 22.1%
Earned prem 3,624.8 15.1% 3,149.8 15.8% 2,719.8 22.1% 2,228.1 24.1%
Loss ratio 79.7% -0.4%p 80.1% -0.2%p 79.5% 2.0%p 77.5% -1.3%p
LT risk L/R (w/ IBNR) 84.0% -3.1%p 87.1% 1.1%p 86.0% 1.8%p 84.2% 3.6%p
LT risk L/R (w/o IBNR) 81.8% -2.1%p 83.9% - 83.2% 5.7%p 77.5% 2.2%p
Total
Losses 3,627.9 -1.6% 4,037.3 12.8% 2,795.7 21.7% 2,296.8 6.7%
Earned prem 4,499.6 11.5% 3,686.8 14.5% 3,526.3 15.8% 3,046.4 16.7%
Loss ratio 80.6% 0.2%p 80.4% -1.2%p 79.3% 3.9%p 75.4% -7.1%p
60/69
Note1) Commercial L/R in ( ) includes RG losses, Note2) FY2011, FY2012 figures are based on K-IFRS
Appendix : Expense Ratio
(KRW Bn) FY2012 FY2011 FY2010 FY2009
G/R G/R G/R G/R
Expenses 1,070.8 22.3% 875.5 2.1% 857.9 7.3% 736.7 8.6%
Wages &
benefits 155.5 -4.4% 162.6 -8.7% 178.0 7.7% 155.2 6.5%
Administrative 254.7 20.9% 210.6 10.4% 190.8 25.0% 143.5 6.4%
Sales-related 657.3 31.6% 499.5 10.7% 451.0 -0.1% 411.4 9.7%
Other expenses 3.3 13.8% 2.9 -92.5% 38.1 24.5% 26.6 15.0%
Expenses recovered 37.8 2.7% 36.8 -14.0% 42.8 -9.9% 53.2 -10.7%
Net expenses 133.1 -84.1% 838.7 2.9% 815.1 8.3% 683.5 10.1%
Gross premium earned 4,499.6 11.5% 4,037.3 14.5% 3,526.3 15.8% 2,609.8 16.7%
Expense Ratio 23.0% 2.2%p 20.8% -2.3%p 23.1% -1.6%p 26.2% -1.5%p
Admin Expense
Ratio 8.8% -0.2%p 9.0% -2.0%p 11.0% -0.1%p 11.9% -0.8%p
Sales Expense
Ratio 14.2% 2.4%p 11.8% -0.3%p 12.1% -1.5%p 14.3% -0.7%p
Combined Ratio 103.6% 2.4%p 101.2% -1.2%p 102.4% 2.3%p 100.1% -8.6%p
61/69
Note1) FY2011, FY2012 figures are based on K-IFRS Note2) Sales-related expenses: acquisition cost/collection fees, commissions paid to agencies, acquisition cost, amortization, deferred acquisition cost, etc Note3) Other expenses: loss adjustment expenses, co-insurance paid, reinsurance commission paid, etc Note4) Expenses recovered: claim service fee recovered, R/I commission received, etc Note5) Sales expenses: collection fees and agencies commissions/ Admin cost: Labor cost excluding sales cost, maintenance cost
Appendix : Long-term Product Portfolio
(KRW Bn) FY2012 Mix FY2011 Mix FY2010 Mix FY2009 Mix
Protection-type 2,892.1 78.9% 2,544.0 79.3% 2,227.3 80.7% 1,922.1 84.5%
Accident 2,242.2 61.1% 1,846.3 57.5% 1,545.6 56.0% 1,270.0 55.8%
Drivers 328.8 9.0% 343.8 10.7% 345.3 12.5% 316.1 13.9%
Property 185.1 5.1% 208.5 6.5% 175.1 6.3% 157.6 6.9%
Disease 97.0 2.6% 108.4 3.4% 121.0 4.4% 136.5 6.0%
Bundle 39.0 1.1% 39.7 1.2% 40.3 1.5% 41.9 1.8%
Personal annuities 106.2 2.9% 95.8 3.0% 86.2 3.1% 77.5 3.4%
Savings 669.0 18.2% 568.9 17.7% 446.7 16.2% 274.5 12.1%
Total 3,667.3 100.0% 3,208.7 100.0% 2,760.2 100.0% 2,274.1 100.0%
Risk+loading premiums 1,654.3 45.1% 1,435.1 45.3% 1,233.3 44.7% 1,012.0 44.5%
Savings premiums 2,013.0 54.9% 1,773.6 54.7% 1,526.9 55.3% 1,262.1 55.5%
13th month persistency 76.1% -3.5%p 79.6% +0.4%p 79.2% -0.4%p 79.6% 6.0%p
25th month persistency 67.0% +2.9%p 64.1% -5.8%p 69.9% 12.4%p 57.5% -5.3%p
62/69
Note) Including one-time payment. Persistency: 6 month average
Appendix : Long-term Product Portfolio 63/69
Category
FY2012 FY2011 FY2010 FY2009
L/R Mix L/R Mix L/R Mix L/R Mix
Death coverage 42.6% 19.7% 39.6% 20.9% 38.0% 22.0% 34.6% 22.4%
Living benefits 97.4% 65.2% 103.8% 62.2% 105.6% 60.4% 102.2% 60.1%
Medical
treatment 108.2% 38.4% 114.1% 36.3% 113.0% 35.5% 108.7% 35.4%
Daily allowance 90.0% 12.0% 99.5% 12.3% 111.3% 12.3% 101.1% 12.8%
Disease 83.3% 10.1% 90.2% 9.2% 88.4% 8.4% 90.4% 8.0%
Other 58.1% 4.7% 59.1% 4.4% 60.3% 4.1% 70.6% 3.9%
Property/other 45.6% 15.1% 49.7% 16.9% 55.1% 17.7% 56.5% 17.6%
Total 78.8% 100.0% 81.2% 100.0% 81.8% 100.0% 79.1% 100.0%
Note1) Loss Ratio: As of Gross Premiums Written, excluding IBN Note2) Death coverage: death/disablement (total disablement, disease death) / Medical treatment: accident treatment, disease treatment Daily allowance: accident daily allowance, disease daily allowance / Disease: cancer, other diseases, CI Other: other accident (fracture/burn, etc), other disease (food poisoning, etc), Property/Other: Driver expenses, liabilities, property loss, fire
Appendix : Long-term Funding Cost & ALM
Long-term FY2012 FY2011 FY2010 FY2009
Funding Cost 3.94% 4.21% 4.19% 4.34%
Fixed 4.06% 5.14% 5.19% 5.36%
Variable 3.88% 4.12% 4.06% 4.16%
Fixed mix 33.2% 9.1% 11.4% 15.3%
Variable mix 66.8% 90.9% 88.6% 84.7%
Investment yield 5.7% 5.6% 5.6% 5.8%
Spread 1.7%p 1.4%p 1.4%p 1.5%p
ALM FY2012(E) FY2011 FY2010 FY2009
Asset Duration 4.43 3.88 4.21 3.92
Bond Duration 6.40 5.43 6.30 5.60
Liability Duration 5.28 4.61 5.04 4.90
Matching ratio 83.9% 84.2% 83.5% 80.0%
Note1) Subject : LT/Pension account, Funding cost: Monthly basis, Investment yield is YTM
Note2) RBC Duration : : FY2009 Asset 4.34, Liability 4.08 FY2011 Asset 4.02, Liability 3.35
FY2010 Asset 4.73, Liability 4.16 FY2012 Asset 4.68, Liability 4.23
64/69
Appendix : Investment Assets Portfolio
(KRW Bn)
FY2012 FY2011 FY2010 FY2009
G/R Mix YTD Mix Mix Mix
Cash & equivalents 460.3 14.6% 5.8% -0.2%p 401.5 6.0% 343.7 6.4% 222.2 4.8%
Equities 177.9 6.0% 2.2% -0.3%p 167.9 2.5% 196.9 3.7% 126.3 2.7%
Trading 0 - - - 0 - 45.6 0.9% 0 0.0%
Available-for-sale 177.9 6.0% 2.2% -0.2%p 167.9 2.5% 151.3 2.8% 126.3 2.7%
Equity-method
stakes 4.5 60.7% 0.1% 0.1%p 2.8 0.0% 2.8 0.1% 190.2 4.1%
Domestic bonds 3,120.4 21.0% 39.0% 0.2%p 2,579.2 38.8% 1,887.9 35.2% 1,597.6 34.5%
Investment funds 1,059.5 44.2% 13.3% 2.2%p 734.9 11.1% 651.2 12.1% 525.4 11.4%
Overseas securities 704.0 15.3% 9.1% -0.1%p 610.4 9.2% 499.7 9.3% 446.1 9.6%
Other 120.5 -21.4% 1.5% -0.8%p 153.3 2.3% 113.8 2.1% 62.1 1.3%
Loans 1,500.2 21.2% 18.8% 0.2%p 1,237.4 18.6% 954.3 17.8% 790.2 17.1%
Real estate 822.5 9.0% 10.3% -1.1%p 754.8 11.4% 717.2 13.4% 667.3 14.4%
Investment assets 7,995.8 20.4% 100% - 6,642.2 100% 5,367.5 100.0% 4,627.6 100.0%
Investment yield 4.8% 0.2%p - - 4.6% - 5.3% - 4.9% -
65/69
Note) FY2011, FY2012 figures are based on K-IFRS
Appendix : Loan Quality
(KRW Bn) FY2012 FY2011 FY2010 FY2009
Normal 1,494.0 1,231.2 943.3 784.2
Precautionary 8.9 0.3 0.5 11.2
Substandard 5.0 11.6 15.0 3.4
Doubtful 0.0 8.5 13.2 3.8
Estimated Loss 9.2 6.6 3.2 2.0
Total 1,517.1 1,258.2 975.2 804.6
NPL ratio 0.94% 2.12% 3.22% 1.14%
Provisions 23.1 26.0 19.7 13.3
Coverage ratio 162.6% 97.2% 62.6% 144.6%
Delinquency ratio 0.28% 0.74% 1.45% 2.45%
Retail
0.57% 0.79% 0.98% 1.02%
Corporate
0.07% 0.68% 2.12% 4.67%
(KRW Bn) FY2012 FY2011 FY2010 FY2009
Retail loan 626.6 686.9 571.7 503.8
Credit 0.0 0.0 0.0 0.0
Secured 254.9 337.2 273.2 228.6
Policyholder 371.7 349.7 298.5 275.1
Corporate loan 890.5 571.3 403.5 300.8
Credit 138.1 97.8 80.2 47.5
Secured 236.5 133.2 130.7 44.6
SOC related 245.8 142.5 65.7 50.8
PF
270.1 197.8 126.9 157.9
Total 1517.1 1,258.2 975.2 804.6
Discounts
difference in
Present value
-1.1 -1.2 0 0
Bad debt
Allowance -16.6 -21.0 -19.7 -13.3
Additional
deferred loan
income
0.8 1.4 -1.2 -1.1
Net Total Loan 1,500.2 12,374 954.3 7,902
66/69
Note1) NPL ratio = Substandard & below /Total
Note2) Based on K-IFRS
Note3) Coverage ratio = Total Provision / substandard & below
Note4) FSB Standard (including retirement accounts, 30 days Overdue
principal and interest, Delinquency on Policyholder loan)
※ FY2011, FY2012 is based on K-IFRS, others are K-GAAP Note1) Corporate Credit : Including Unsecured private placement bonds Note2) Corporate secured : Including mortgage bond, RP, CP Note3) SOC related : including development enterprise loan
Note1)
Note2)
Note3)
Note4)
Note1)
Note2)
Note3)
(KRW Bn)
Appendix : PF Loan
Debtor Site/Project Constructor Loan
amount Maturity NPL Remark
Saenal, Co. Gimpo apartment Shindongah, NamKwang,
Chonggu 10.8 ’14-12-31
Pre-
cautionary,
fixed
81.8% is reserved in bad debt allowance
N-mode House, Co. Wonhyo-ro Complex
(Office & apartment)
Prime Construction,
Dongah Construction
8.1 ‘14-04-09 Pre-
cautionary
As of Mar 74.6% in process (Planned
process 81.5%) / 93.7% Contracted
C-First, LLC Chong-na Complex
(Office & apartment) PF ABL POSCO
Engineering 13.0 ‘13-06-15 Normal As of Mar 100% in process (Planned
process 100%) / 96.5% contracted
Song-do Global Complex Development, Co.
Song-do A3 block apartment Lotte
Engineering & Construction
5.0 ‘13-11-30 Normal As of Mar 87.29% in process (Planned
process 87.32%) / 85.1% contracted
S.L D&C, Ltd Chun-ho Dong Complex
(Office & apartment) Samsung C&T Corporation 34.3 ’16-06-24 Normal Permit in progress
White Korea, Ltd Kangseo Kayang GS Xi
mixed-use development GS Cons 21.8 ’14-03-28 Normal
As of Mar 81% in process (Planned
process 78.4%) / 68.69% contracted
Digiprism Co., Ltd Uiwang Poil Information
Technology Center
Samsung Heavy
Indurtries 28.9 ‘14-09-26 Normal
As of Mar 37.4% in process (Planned
process 38.8%) / 10.4% contracted
Karkas Ⅰ, LLC Cheon-an Sungsung-dong
City Development Daewoo E&C 30.0 ‘13-10-28 Normal Permit in progress
SC Co., Ltd Yongin Dongbaek
Healthcare Town GS Cons 40.0 ‘13-08-17 Normal
Start constructing and contracting in 1H
of 2013
Central Janggyo Co., Ltd Janggyo District 4
Hotel Development Daelim 48.3 ‘14-03-18 Normal Permit in progress
Minrak District 2
House Development REITs
Minrak District 2 Block 8
Development Daewoo E&C 4.95 ‘16-09-28 Normal Permit in progress
JWL Co., Ltd Gwangju Dochuck Distribution
Center Development LSIS 25 ‘13-10-18 Normal Permit in progress
Total 270.15
67/69
Appendix : P & L
(KRW Bn) FY2012 FY2011 FY2010 FY2009
G/R G/R G/R G/R
Net premium earned 4,499.5 11.4% 4,037.3 14.5% 3,526.3 15.8% 3,046.4 16.7%
Gross premium written 4,780.4 12.4% 4,254.3 10.9% 3,836.1 16.7% 3,288.0 13.5%
Net premium written 4,530.4 12.7% 4,019.5 12.0% 3,590.4 18.9% 3,020.9 14.8%
Incurred losses 153.0 -88.9% 1,380.3 10.3% 2,795.7 18.2% 993.2 -2.7%
Refund of LT insurance
polices 948.0 29.4% 732.7 8.2% 673.7 2.6% 656.8 -1.0%
Net operating expenses 1,033.2 23.2% 838.7 14.2% 815.1 8.3% 752.4 10.1%
Incr in premium reserves
for LT savings 1,170.7 3.7% 1,129.0 20.1% 940.3 47.2% 638.9 37.2%
Net incr in policyholders’
dividend reserves 5.5 25.0% 4.4 -44.5% 7.4 -6.0% 7.9 182.1%
Incr in catastrophe reserves - - - - 11.3 -17.0% 13.6 -
Underwriting income -160.9 - -47.8 - -95.8 - -16.4 -
Investment income 463.8 72.7% 268.6 15.2% 257.0 23.8% 207.6 95.5%
Non-operating income -10.1 215.6% -3.2 - -4.9 - -4.0 -
Ordinary income 172.3 -20.8% 217.5 52.1% 156.3 -16.5% 187.2 -
Incurred tax expenses 41.6 -21.4% 52.9 55.5% 35.4 -24.3% 46.8 -
Net income 130.7 -20.6% 164.6 51.1% 120.9 -13.9% 140.4 -
68/69
Note) FY2011, FY2012 figures are based on K-IFRS
Appendix : B/S
(KRW Bn) FY2012 FY2011 FY2010 FY2009
G/R G/R G/R G/R
Total assets 10,158.4 17.4% 8,654.5 24.1% 6,973.9 15.6% 6,035.0 14.6%
Investment assets 7,995.8 20.4% 6,642.2 23.7% 5,367.5 16.0% 4,627.6 11.8%
Non-invested assets 2,162.6 7.5% 2,012.3 25.3% 1,606.4 14.1% 1,407.4 24.9%
Total liabilities 9,071.7 17.0% 7,755.5 22.0% 6,358.3 18.7% 5,355.0 10.6%
Policy reserves 8,405.2 18.4% 7,101.3 24.5% 5,702.1 21.4% 4,697.0 11.9%
Cat reserves 153.3 7.4% 142.8 9.2% 130.8 9.5% 119.4 12.9%
Other liabilities 666.6 1.9% 654.2 24.5% 525.4 -2.5% 538.9 0.2%
Total shareholders’
equity 1,086.7 20.9% 899.0 46.0% 615.6 -9.5% 680.0 59.8%
Capital stock 48.4 0.0% 48.4 11.0% 43.6 -29.5% 61.9 0.0%
Capital surplus 261.3 0.0% 261.3 53.3% 170.4 -27.7% 235.8 0.6%
Retained earnings 326.2 21.7% 268.0 -30.7% 386.8 29.9% 297.8 89.2%
Capital adjustment 6.0 15.4% 5.2 - -250.9 - -116.6 -
Solvency margin ratio - - - - 162.9% -68.0%p 230.9% 41.0%p
RBC Ratio 183.1% 7.0%p 176.1% -22.8%p 198.9% -70.8%p 269.7% -
69/69
Note) FY2011, FY2012 figures are based on K-IFRS
Thank you!!
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