meritz insurance fy08 review & fy09...
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MeritzMeritzMeritzMeritzMeritzMeritzMeritzMeritz InsuranceInsuranceInsuranceInsuranceInsuranceInsuranceInsuranceInsurance
FY08 Review & FY09 GuidanceFY08 Review & FY09 GuidanceFY08 Review & FY09 GuidanceFY08 Review & FY09 GuidanceFY08 Review & FY09 GuidanceFY08 Review & FY09 GuidanceFY08 Review & FY09 GuidanceFY08 Review & FY09 Guidance
May 2009May 2009May 2009May 2009May 2009May 2009May 2009May 2009
1111
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 FY09 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.
DisclaimerDisclaimerDisclaimerDisclaimerDisclaimerDisclaimerDisclaimerDisclaimer
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Corporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate Overview
FY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 Review
FY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & Guidance
IssueIssueIssueIssueIssueIssueIssueIssue
Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)
ContentsContentsContentsContentsContentsContentsContentsContents
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1111----1. History1. History1. History1. History
Era of Growth
(1983~2004)
Second rebirth
(2005~ )
Rebirth
(1950~1982)
Era of foundation
& exploration(1922~1949)
� 1996.05 Total assets exceed W1t
� 1983.12 Head office relocated to Yeoido
� 2009.01 Total assets exceed W5t
� 2008.07 Founding of Meritz Asset Management
� 2008.04 Founding of Meritz Financial Information Service
� 2007.08 Share offering (W225.7b)
� 2006.11 Acquisition of Meritz Investment Bank as subsidiary
� 2006.02 Stock split 10:1 (W5,000 →W500)
� 2005.11 Acquisition of Meritz Securities as subsidiary
� 2005.10 Head office relocated to new building in Kangnam
� 2005.10 Rechristened Meritz Fire & Marine Insurance
� 2005.03 Disaffiliates from Hanjin Group
� 1976.12 Sales exceed W10b, a first among Korean insurers
� 1967.07 Hanjin Group acquires Oriental Fire & Marine Insurance
� 1956.07 IPO on KSE, becoming Korea’s first listed insurer
� 1950.05 Rechristened Oriental Fire & Marine Insurance
� 1922.10 Founding of Chosun Fire & Marine Insurance
(Korea’s first non-life insurance company)
4444
Shareholders (Mar 31, 2009)Shareholders (Mar 31, 2009)Shareholders (Mar 31, 2009)Shareholders (Mar 31, 2009)
� Major shareholderMajor shareholderMajor shareholderMajor shareholder’’’’s stakes stakes stakes stake : 22.8%: 22.8%: 22.8%: 22.8%
� Jung-Ho Cho: 21.4% (26,500,725 shares), etc
� FreeFreeFreeFree----float: 53.8%float: 53.8%float: 53.8%float: 53.8%
� Foreign investors: 9.6%, domestic : 44.2%
22.8%22.8%22.8%22.8%
6.5%6.5%6.5%6.5%
3.0%3.0%3.0%3.0%
13.9%13.9%13.9%13.9%
9.6%9.6%9.6%9.6%
44.2%44.2%44.2%44.2%
1111----2.Shareholder Structure2.Shareholder Structure2.Shareholder Structure2.Shareholder Structure
AffiliatesAffiliatesAffiliatesAffiliates
57.2%
5.5% 100%100%
MeritzMeritzMeritzMeritz
InsuranceInsuranceInsuranceInsurance
MeritzMeritzMeritzMeritz
SecuritiesSecuritiesSecuritiesSecurities
MeritzMeritzMeritzMeritz
InvestmentInvestmentInvestmentInvestment
BankBankBankBank
MeritzMeritzMeritzMeritz
AssetAssetAssetAsset
ManagementManagementManagementManagement
MeritzMeritzMeritzMeritzFinancialFinancialFinancialFinancial
InformationInformationInformationInformationServicesServicesServicesServices
26.8%
• ForeignersForeignersForeignersForeigners
• Major shareholdersMajor shareholdersMajor shareholdersMajor shareholders
• ESOPESOPESOPESOP
• Related Related Related Related companiescompaniescompaniescompanies
• DomesticDomesticDomesticDomestic
• TreasuryTreasuryTreasuryTreasury
5555
KOSPI, 88.72
보험업종, 115.79
메리츠화재, 97.90
-
50
100
150
200
250
300
350
06-3-31 06-9-30 07-3-31 07-9-30 08-3-31 08-9-30 09-3-31
[Relative Price Trend (FY[Relative Price Trend (FY[Relative Price Trend (FY[Relative Price Trend (FY’’’’06 ~ FY06 ~ FY06 ~ FY06 ~ FY’’’’08)]08)]08)]08)]
0.901.851.66P/B
4,2934,8644,575BPS
-8.1511.3012.65P/E
601
07.03.31
797
08.03.31
-475EPS
09.03.31(Unit: KRW, x)(Unit: KRW, x)(Unit: KRW, x)(Unit: KRW, x)
1111----3. Share Price Performance3. Share Price Performance3. Share Price Performance3. Share Price Performance
Insurance sector 115.79%
Meritz 97.90%
KOSPI 88.72%
6666
� Dividend policy
• The first insurance company to pay an interim dividend (Sep 2007)
-0.6%-W58.8bnW50 (5.3b)Total
---W58.8b-Year-end
12.6%0.6%W42.3bW50 (5.3b)Interim
FY08
Total
Year-end
Interim
36.6%2.5%W71.1bW225 (26.0b)
20.0%1.4%W71.1bW125 (14.2b)
22.2%1.4%W35.8bW100FY06
20.7%1.1%W56.9bW100 (11.8b)
FY07
29.6%2.4%W26.4b W100FY05
36.7%4.9%W21.1b W1,000FY04
Payout ratio Dividend ratioNet incomeDividend
3.60%2.90%3.80%1.80%Dividend yield
22.6%16.4%34.7%23.4%Payout ratio
LIGDongbuHyundaiSamsung
1111----4. Dividend Track Record 4. Dividend Track Record 4. Dividend Track Record 4. Dividend Track Record
[Dividend history]
Note: Implemented 10:1 stock split in Feb 2006
[FY08 industry dividend]
7777
1111----5. Our Management5. Our Management5. Our Management5. Our Management
- CEO since June 2005
- Chief Operations Officer at PCA Life (Korea)
- Chief Information Officer at Samsung Fire & Marine
- 26 yrs of experience at US P&C insurers (General Accident, Harleysville Insurance Group)
� Vice Chairman & CEO: Vice Chairman & CEO: Vice Chairman & CEO: Vice Chairman & CEO: MyungMyungMyungMyung SooSooSooSoo Michael Michael Michael Michael WohnWohnWohnWohn
� Chairman: Jung Ho ChoChairman: Jung Ho ChoChairman: Jung Ho ChoChairman: Jung Ho Cho
� CFO: Jin CFO: Jin CFO: Jin CFO: Jin KyuKyuKyuKyu SongSongSongSong
- Chairman of Meritz Insurance since 2003
- Chairman & CEO of Meritz Securities (2003)
- Vice Chairman & CEO of Hanjin Securities (1999)
- Swiss International Institute for Management Development (MBA)
- CFO of Meritz Insurance since May 2005, head of strategic planning division
- Current member of Korean Actuarial Association
- More than 20 years in the non-life insurance industry
- Actuary and risk management manager of Samsung Fire & Marine (2005)
8888
Corporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate Overview
FY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 Review
FY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & Guidance
IssueIssueIssueIssueIssueIssueIssueIssue
Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)
ContentsContentsContentsContentsContentsContentsContentsContents
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9999
2 2 2 2 ---- 1. Sales1. Sales1. Sales1. Sales
FY07FY05 FY06
1,876.9bn1,876.9bn1,876.9bn1,876.9bn
8.0%8.0%8.0%8.0%
2,180.2bn2,180.2bn2,180.2bn2,180.2bn
8.1%8.1%8.1%8.1%
2,534.0bn2,534.0bn2,534.0bn2,534.0bn
8.2%8.2%8.2%8.2%
Gross premium, M/S
Growth rate (Meritz)
Growth rate (industry)
FY08FY08FY08FY08FY08FY08FY08FY08FY04
1,694.8bn1,694.8bn1,694.8bn1,694.8bn
7.9%7.9%7.9%7.9%
2,896.4bn2,896.4bn2,896.4bn2,896.4bn
8.3%8.3%8.3%8.3%
� FY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averageeee�� FY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averagFY08 premium growth slows, but continues to beat industry averageeeeeeee
9.8%9.8%9.8%9.8%
10.7%10.7%10.7%10.7%
16.2%16.2%16.2%16.2% 16.2%16.2%16.2%16.2%
14.3%14.3%14.3%14.3%
8.2%8.2%8.2%8.2% 9.5%9.5%9.5%9.5%
14.5%14.5%14.5%14.5%14.8%14.8%14.8%14.8%
10.6%10.6%10.6%10.6%
Premium,Premium,Premium,Premium,
market sharemarket sharemarket sharemarket share
10101010
2 2 2 2 ---- 1. Asset1. Asset1. Asset1. Asset
FY07FY05 FY06
3,110.0bn3,110.0bn3,110.0bn3,110.0bn
7.4%7.4%7.4%7.4%
3,747.8bn3,747.8bn3,747.8bn3,747.8bn
7.8%7.8%7.8%7.8%
4,564.5bn4,564.5bn4,564.5bn4,564.5bn
8.1%8.1%8.1%8.1%
FY08FY08FY08FY08FY08FY08FY08FY08FY04
2,676.1bn2,676.1bn2,676.1bn2,676.1bn
7.2%7.2%7.2%7.2%
5,265.5bn5,265.5bn5,265.5bn5,265.5bn
8.5%8.5%8.5%8.5%
� FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)�� FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)FY08 total assets exceed W5t (invested assets W4.1t)
Total assets,Total assets,Total assets,Total assets,
market sharemarket sharemarket sharemarket share
Invested assetsInvested assetsInvested assetsInvested assets 2,260.3bn2,260.3bn2,260.3bn2,260.3bn
7.2%7.2%7.2%7.2%
2,554.6bn2,554.6bn2,554.6bn2,554.6bn
7.3%7.3%7.3%7.3%
3,000.4bn3,000.4bn3,000.4bn3,000.4bn
7.6%7.6%7.6%7.6%
3,624.0bn3,624.0bn3,624.0bn3,624.0bn
7.9%7.9%7.9%7.9%
4,138.3bn4,138.3bn4,138.3bn4,138.3bn
8.1%8.1%8.1%8.1%
12.3%12.3%12.3%12.3% 13.4%13.4%13.4%13.4%
14.6%14.6%14.6%14.6%
17.0%17.0%17.0%17.0%
11.8%11.8%11.8%11.8%
14.8%14.8%14.8%14.8%
16.2%16.2%16.2%16.2%
20.5%20.5%20.5%20.5%
21.8%21.8%21.8%21.8%
15.4%15.4%15.4%15.4%
Note: FY08 market share and industry growth are based on Feb 2009 (accumulated)
Total assets, M/S
Total asset growth (Meritz)
Total asset growth (industry)
Invested assets, M/S
11111111
2 2 2 2 ---- 1. Market Capitalization1. Market Capitalization1. Market Capitalization1. Market Capitalization
FY07FY05 FY06
423.4bn423.4bn423.4bn423.4bn
4.0%4.0%4.0%4.0%
556.7bn556.7bn556.7bn556.7bn
4.2%4.2%4.2%4.2%
1,208.3bn1,208.3bn1,208.3bn1,208.3bn
6.4%6.4%6.4%6.4%
Market cap, M/S
Growth rate (Meritz)
Growth rate (industry)
FY08FY08FY08FY08FY08FY08FY08FY08FY04
160.8bn160.8bn160.8bn160.8bn
2.9%2.9%2.9%2.9%
437.2bn437.2bn437.2bn437.2bn
3.5%3.5%3.5%3.5%
� Uncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, price rebounding graduallyce rebounding graduallyce rebounding graduallyce rebounding gradually�� Uncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, priUncertainties (RG, overseas investments) cleaned up in FY08, price rebounding graduallyce rebounding graduallyce rebounding graduallyce rebounding graduallyce rebounding graduallyce rebounding graduallyce rebounding graduallyce rebounding gradually
May 12, 2009May 12, 2009May 12, 2009May 12, 2009
768.8bn768.8bn768.8bn768.8bn
5.0%5.0%5.0%5.0%
10.0%10.0%10.0%10.0%
163.3%163.3%163.3%163.3%
117.0%117.0%117.0%117.0%
△△△△63.8%63.8%63.8%63.8%
78.4%78.4%78.4%78.4%
31.5%31.5%31.5%31.5%
12.3%12.3%12.3%12.3%
89.6%89.6%89.6%89.6%
24.0%24.0%24.0%24.0%
43.7%43.7%43.7%43.7%
△△△△ 33.8%33.8%33.8%33.8%
23.5%23.5%23.5%23.5%
Market cap,Market cap,Market cap,Market cap,
market sharemarket sharemarket sharemarket share
12121212
2 2 2 2 ---- 1. Organization1. Organization1. Organization1. Organization
FY07FY05 FY06 FY08FY08FY08FY08FY08FY08FY08FY08FY04
■■■■■■■■ Distribution Distribution Distribution Distribution Distribution Distribution Distribution Distribution
■■■■■■■■ EmployeesEmployeesEmployeesEmployeesEmployeesEmployeesEmployeesEmployees
FY07FY05 FY06 FY08FY08FY08FY08FY08FY08FY08FY08FY04
1,993
persons
10.0%
2,012
10.5%
2,000
10.7%
2,036
10.4%1,9171,9171,9171,917
9.7%9.7%9.7%9.7%
8,405
persons
8.0%
9,459
8.2%
9,081
7.9%
10,579
9.5%
18,47018,47018,47018,470
9.6%9.6%9.6%9.6%
△△△△2.2%2.2%2.2%2.2%
△△△△0.9%0.9%0.9%0.9%
12.5%12.5%12.5%12.5%
9.9%9.9%9.9%9.9%
△△△△4.0%4.0%4.0%4.0%
0.1%0.1%0.1%0.1%
△△△△ 3.5 %3.5 %3.5 %3.5 %
16.5%16.5%16.5%16.5%
74.6%74.6%74.6%74.6%
73.5%73.5%73.5%73.5%
Distribution, M/S
2.4%2.4%2.4%2.4%
2.5%2.5%2.5%2.5%
1.0%1.0%1.0%1.0%
△△△△ 3.6%3.6%3.6%3.6%
△△△△0.6%0.6%0.6%0.6%
△△△△2.5%2.5%2.5%2.5%
1.8%1.8%1.8%1.8%
3.4 %3.4 %3.4 %3.4 %
△△△△6.1%6.1%6.1%6.1%
1.0 %1.0 %1.0 %1.0 %
Growth (Meritz)
Growth (industry)
Employees, M/S
Growth (Meritz)
Growth (industry)
13131313
71.171.171.171.1
99.699.699.699.6
58.5
12.0
----58.858.858.858.8
-30.2
-42.0
57.4
56.3
(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
FY08FY08
-181.7
2 2 2 2 ---- 2. Profit2. Profit2. Profit2. Profit
FY07FY07 FY07FY07
++
ordinary ordinary
changechange
Cat. reserve
reversalC/R
efficiencyLow
investment
yield
Organicgrowtheffect
RG lossRG lossRG lossRG lossRG lossRG lossRG lossRG loss Bad asset
write-off
Additional
DAC
amortization
Tax
Ordinary businessOrdinary businessOrdinary businessOrdinary business OneOneOneOne----off itemsoff itemsoff itemsoff items
[Net income change from FY07 to FY08][Net income change from FY07 to FY08][Net income change from FY07 to FY08][Net income change from FY07 to FY08]
-60.2
Overseas investmentOverseas investmentOverseas investmentOverseas investment
redemption 7.8redemption 7.8redemption 7.8redemption 7.8
writewritewritewrite----off 38.6off 38.6off 38.6off 38.6
credit enhancement 4.9credit enhancement 4.9credit enhancement 4.9credit enhancement 4.9
Asset revaluation 8.9Asset revaluation 8.9Asset revaluation 8.9Asset revaluation 8.9
14141414
2 2 2 2 ---- 2. Profit2. Profit2. Profit2. Profit
FY07FY07FY07FY07FY07FY07FY07FY07 FY08FY08FY08FY08FY08FY08FY08FY08 Change
Long-term underwriting profit
Auto underwriting profit
Investment
General administrati
on, etc
Commercial
underwriting profit
RG lossRG lossRG lossRG lossRG lossRG lossRG lossRG loss
(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
71.171.171.171.1
+15.3+15.3+15.3+15.3
+22.1+22.1+22.1+22.1+7.2+7.2+7.2+7.2 ----73.073.073.073.0
--------58.858.858.858.858.858.858.858.8
+23.9+23.9+23.9+23.9----129.9129.9129.9129.9
--------125.4125.4125.4125.4125.4125.4125.4125.4
Non-operating income +2.8
tax 49.5General admin -
28.4
RG loss RG loss RG loss RG loss RG loss RG loss RG loss RG loss --------181.7181.7181.7181.7181.7181.7181.7181.7
Catastrophe reserve Catastrophe reserve Catastrophe reserve Catastrophe reserve Catastrophe reserve Catastrophe reserve Catastrophe reserve Catastrophe reserve
reversal 56.3reversal 56.3reversal 56.3reversal 56.3reversal 56.3reversal 56.3reversal 56.3reversal 56.3
Bad asset Bad asset Bad asset Bad asset
writewritewritewrite----off ,off ,off ,off ,
Etc.Etc.Etc.Etc.
Note: Underwriting profit includes sales-related expenses (acquisition, reinsurance commission)
[Net income change from FY07 to FY08][Net income change from FY07 to FY08][Net income change from FY07 to FY08][Net income change from FY07 to FY08]
15151515
2 2 2 2 ---- 3. Long3. Long3. Long3. Long----term Insurance (1)term Insurance (1)term Insurance (1)term Insurance (1)
53.5%
25.7%
18.7%
24.0% 23.3%
-0.9%
25.1%
16.3%
20.7%20.7%
FY2004 FY2005 FY2006 FY2007 FY2008
Meritz Top4
28.1%25.8% 25.7%
12.5%
15.9%
19.4%
16.3%
11.8%
19.1%
21.2%
FY2004 FY2005 FY2006 FY2007 FY2008
Meritz Top4
� Stable growth compared to topStable growth compared to topStable growth compared to topStable growth compared to top----4 average4 average4 average4 average�� Stable growth compared to topStable growth compared to topStable growth compared to topStable growth compared to topStable growth compared to topStable growth compared to topStable growth compared to topStable growth compared to top--------4 average4 average4 average4 average4 average4 average4 average4 average � 7777% edge vs top% edge vs top% edge vs top% edge vs top----4 4 4 4 for more than 5 years for more than 5 years for more than 5 years for more than 5 years �� 77777777% edge vs top% edge vs top% edge vs top% edge vs top% edge vs top% edge vs top% edge vs top% edge vs top--------4 4 4 4 4 4 4 4 for more than 5 years for more than 5 years for more than 5 years for more than 5 years for more than 5 years for more than 5 years for more than 5 years for more than 5 years
[LT initial premium growth][LT initial premium growth][LT initial premium growth][LT initial premium growth] [LT premium growth][LT premium growth][LT premium growth][LT premium growth]
16161616
2 2 2 2 ---- 3. Long3. Long3. Long3. Long----term Insurance (2)term Insurance (2)term Insurance (2)term Insurance (2)
[Long[Long[Long[Long----term combined ratio]term combined ratio]term combined ratio]term combined ratio]
� Combined ratio outperforming industry peers since FY06Combined ratio outperforming industry peers since FY06Combined ratio outperforming industry peers since FY06Combined ratio outperforming industry peers since FY06
� C/R 2.7%p lower than top 4 in FY08 due to lower burden from higC/R 2.7%p lower than top 4 in FY08 due to lower burden from higC/R 2.7%p lower than top 4 in FY08 due to lower burden from higC/R 2.7%p lower than top 4 in FY08 due to lower burden from highhhh----yield legacy products, yield legacy products, yield legacy products, yield legacy products,
sales sales sales sales focus on protectionfocus on protectionfocus on protectionfocus on protection----type products (lower loss ratio)type products (lower loss ratio)type products (lower loss ratio)type products (lower loss ratio)
� ProtectionProtectionProtectionProtection----type insurance: slightly higher expense ratio, but lower loss ratype insurance: slightly higher expense ratio, but lower loss ratype insurance: slightly higher expense ratio, but lower loss ratype insurance: slightly higher expense ratio, but lower loss ratiotiotiotio
� Combined ratio outperforming industry peers since FY06Combined ratio outperforming industry peers since FY06Combined ratio outperforming industry peers since FY06Combined ratio outperforming industry peers since FY06
� C/R 2.7%p lower than top 4 in FY08 due to lower burden from higC/R 2.7%p lower than top 4 in FY08 due to lower burden from higC/R 2.7%p lower than top 4 in FY08 due to lower burden from higC/R 2.7%p lower than top 4 in FY08 due to lower burden from highhhh----yield legacy products, yield legacy products, yield legacy products, yield legacy products,
sales sales sales sales focus on protectionfocus on protectionfocus on protectionfocus on protection----type products (lower loss ratio)type products (lower loss ratio)type products (lower loss ratio)type products (lower loss ratio)
� ProtectionProtectionProtectionProtection----type insurance: slightly higher expense ratio, but lower loss ratype insurance: slightly higher expense ratio, but lower loss ratype insurance: slightly higher expense ratio, but lower loss ratype insurance: slightly higher expense ratio, but lower loss ratiotiotiotio
92.2%92.2%92.2%92.2% 89.6%89.6%89.6%89.6% 85.0%85.0%85.0%85.0% 82.5%82.5%82.5%82.5% 79.1%79.1%79.1%79.1%
14.3%14.3%14.3%14.3% 17.4%17.4%17.4%17.4% 18.7%18.7%18.7%18.7% 18.8%18.8%18.8%18.8% 20.8%20.8%20.8%20.8%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Expense
ratio
Loss ratio90.4%90.4%90.4%90.4% 88.8%88.8%88.8%88.8% 86.6%86.6%86.6%86.6% 84.4%84.4%84.4%84.4% 82.5%82.5%82.5%82.5%
14.9%14.9%14.9%14.9% 15.7%15.7%15.7%15.7% 17.2%17.2%17.2%17.2% 17.3%17.3%17.3%17.3% 20.1%20.1%20.1%20.1%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Expense
ratio
Loss
ratio
[[[[MeritzMeritzMeritzMeritz]]]] [Top 4][Top 4][Top 4][Top 4]
106.5%106.5%106.5%106.5% 107.0%107.0%107.0%107.0%
99.9%99.9%99.9%99.9%
105.3%104.5% 103.7%103.7%103.7%103.7%
101.3%101.3%101.3%101.3%
102.6%
103.8%
101.7%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Meritz Top4
17171717
2 2 2 2 ---- 3. Long3. Long3. Long3. Long----term Insurance (3)term Insurance (3)term Insurance (3)term Insurance (3)
[Risk premium mix, by underwriting year][Risk premium mix, by underwriting year][Risk premium mix, by underwriting year][Risk premium mix, by underwriting year]
[Risk premium mix, by fiscal year][Risk premium mix, by fiscal year][Risk premium mix, by fiscal year][Risk premium mix, by fiscal year]
[Loss ratio, by fiscal year][Loss ratio, by fiscal year][Loss ratio, by fiscal year][Loss ratio, by fiscal year]
[Unit: %]
FY05 FY08FY07FY06
27.8
29.9
17.8
24.5
22.1
32.6
18.7
26.6
16.3
34.9
20.7
28.2164.5bn
229.9bn
308.4bn
395.6bn
40.733.6
113.7106.4 109.7
78.676.5
44.644.2
52.451.247.464.3
108.7
94.0
68.568.2 76.2
73.6
70.6
FY05 FY06 FY07 FY08
(Unit : %)
Death Liabilities Life(g) Life(ng) Total
36.5
23.5
30.7
9.3
54.2
[Unit: %]
UY05 UY08UY07UY06
37.237.237.237.2
22.822.822.822.8
19.319.319.319.3
20.720.720.720.7
33.433.433.433.4
24.024.024.024.0
18.118.118.118.1
24.524.524.524.5
26.526.526.526.5
31.231.231.231.2
18.218.218.218.2
24.024.024.024.0
24.324.324.324.3
31.931.931.931.9
21.421.421.421.4
22.422.422.422.4
37.4bn37.4bn37.4bn37.4bn
55.3bn55.3bn55.3bn55.3bn
67.2bn67.2bn67.2bn67.2bn
90.7bn90.7bn90.7bn90.7bn
Life (non-guaranteed)
Life (guaranteed)
Liabilities/property
Death
43.8
42.2
42.6
40.0
48.9
45.3
42.3Life(none-guaranteed)Life(guaranteed)Liabilities/property
Death
18181818
2 2 2 2 ---- 3. Long3. Long3. Long3. Long----term Insurance (4)term Insurance (4)term Insurance (4)term Insurance (4)
Total 100.00%Total 100.00%Total 100.00%Total 100.00%
Savings 17.68%Savings 17.68%Savings 17.68%Savings 17.68%
Accident 63.52%Accident 63.52%Accident 63.52%Accident 63.52%
Property 6.51%Property 6.51%Property 6.51%Property 6.51%
Drivers 10.53%Drivers 10.53%Drivers 10.53%Drivers 10.53%
Disease 0.01%Disease 0.01%Disease 0.01%Disease 0.01%
Pension 1.76%Pension 1.76%Pension 1.76%Pension 1.76%
AssumptionAssumptionAssumptionAssumption
□□□□ Project period: 30 yearsProject period: 30 yearsProject period: 30 yearsProject period: 30 years
□□□□ Discount rate: 11.5 %Discount rate: 11.5 %Discount rate: 11.5 %Discount rate: 11.5 %
□□□□ Investment yield: 5.0 %Investment yield: 5.0 %Investment yield: 5.0 %Investment yield: 5.0 %
□□□□ Tax rate: 27.5%Tax rate: 27.5%Tax rate: 27.5%Tax rate: 27.5%
□□□□ Inflation: 3.0%Inflation: 3.0%Inflation: 3.0%Inflation: 3.0%
□□□□ Required capital: 150% of solvency guidelineRequired capital: 150% of solvency guidelineRequired capital: 150% of solvency guidelineRequired capital: 150% of solvency guideline
[Profit margin by coverage][Profit margin by coverage][Profit margin by coverage][Profit margin by coverage]
Coverage
Agency 30.0%Agency 30.0%Agency 30.0%Agency 30.0%
Other channel 70.0%
10.6%10.6%10.6%10.6%
9.9%9.9%9.9%9.9%
10.4%10.4%10.4%10.4%
7.2%7.2%7.2%7.2%
11.2%11.2%11.2%11.2%
10.7%10.7%10.7%10.7%
10.4%10.4%10.4%10.4%
11.6%11.6%11.6%11.6%
1.5%1.5%1.5%1.5%
New contract %
Profit MarginProfit MarginProfit MarginProfit Margin
19191919
2 2 2 2 ---- 3. Auto Insurance3. Auto Insurance3. Auto Insurance3. Auto Insurance
[Auto loss ratio trend][Auto loss ratio trend][Auto loss ratio trend][Auto loss ratio trend]
� Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since FY07FY07FY07FY07
---- Rising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratio
---- Rapid improvement in Rapid improvement in Rapid improvement in Rapid improvement in ““““loss cost,loss cost,loss cost,loss cost,”””” lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio →→→→ suggests further improvementsuggests further improvementsuggests further improvementsuggests further improvement
�� Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since Loss ratio shrinking since FY07FY07FY07FY07FY07FY07FY07FY07
-------- Rising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratioRising average premium leads to improvement in FY07 loss ratio
-------- Rapid improvement in Rapid improvement in Rapid improvement in Rapid improvement in Rapid improvement in Rapid improvement in Rapid improvement in Rapid improvement in ““““““““loss cost,loss cost,loss cost,loss cost,loss cost,loss cost,loss cost,loss cost,”””””””” lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio lower FY08 loss ratio →→→→→→→→ suggests further improvementsuggests further improvementsuggests further improvementsuggests further improvementsuggests further improvementsuggests further improvementsuggests further improvementsuggests further improvement
75.1%
78.5%
74.2%
69.9%
0.5%
13.3%
3.1%
5.7%
6.8%8.2%9.3%
1.6%
FY2005 FY2006 FY2007 FY2008
L/R Average rate G/R Loss Cost G/R
76.2%76.2%76.2%76.2%75.1%75.1%75.1%75.1% 74.2%74.2%74.2%74.2%
69.9%69.9%69.9%69.9%71.9%71.9%71.9%71.9%
77.5%77.5%77.5%77.5%
71.4%71.4%71.4%71.4%
68.3%68.3%68.3%68.3%
78.5%78.5%78.5%78.5%
76.0%76.0%76.0%76.0%
4.3%4.3%4.3%4.3%
2.8%2.8%2.8%2.8%
1.6%1.6%1.6%1.6%
1.0%1.0%1.0%1.0%
-0 .9%-0 .9%-0 .9%-0 .9%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Meritz Top 4 Gap
[Industry loss ratio][Industry loss ratio][Industry loss ratio][Industry loss ratio]
20202020
2 2 2 2 ---- 3. Commercial Insurance3. Commercial Insurance3. Commercial Insurance3. Commercial Insurance
[Commercial loss ratio trend][Commercial loss ratio trend][Commercial loss ratio trend][Commercial loss ratio trend]
� Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4�� Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained Even without captive market, commercial loss ratio has remained at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4at only 2%p higher than top 4
43.5%43.5%43.5%43.5%
49.1%49.1%49.1%49.1%
53.0%53.0%53.0%53.0%
59.8%59.8%59.8%59.8% 60.2%60.2%60.2%60.2%
48.5%48.5%48.5%48.5%47.0%47.0%47.0%47.0%
50.9%50.9%50.9%50.9%
54.2%54.2%54.2%54.2%
58.4%58.4%58.4%58.4%
-5.0%-5.0%-5.0%-5.0%
1.8%1.8%1.8%1.8%
5.6%5.6%5.6%5.6%
2.1%2.1%2.1%2.1%2.1%2.1%2.1%2.1%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Meritz Top 4 Gap
43.5%49.1%
53.0%59.8%
189.9%
61.1%
FY2004 FY2005 FY2006 FY2007 FY2008 (Before RG)
[Industry loss ratio][Industry loss ratio][Industry loss ratio][Industry loss ratio]
21212121
2 2 2 2 ---- 3. Administration Cost Efficiency3. Administration Cost Efficiency3. Administration Cost Efficiency3. Administration Cost Efficiency
� Wage reduction, laborWage reduction, laborWage reduction, laborWage reduction, labor----management collaboration management collaboration management collaboration management collaboration
→→→→ Administration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses top----4 companies 4 companies 4 companies 4 companies
�� Wage reduction, laborWage reduction, laborWage reduction, laborWage reduction, laborWage reduction, laborWage reduction, laborWage reduction, laborWage reduction, labor--------management collaboration management collaboration management collaboration management collaboration management collaboration management collaboration management collaboration management collaboration
→→→→→→→→ Administration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses topAdministration cost efficiency surpasses top--------4 companies 4 companies 4 companies 4 companies 4 companies 4 companies 4 companies 4 companies
11.8%11.8%11.8%11.8%
14.5%14.5%14.5%14.5% 14.3%14.3%14.3%14.3%
13.3%13.3%13.3%13.3%
12.5%12.5%12.5%12.5%
12.9%
12.1%
12.4%12.0%
13.6%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Meritz Top 4
Note: Administration cost: Administration cost: Administration cost: Administration cost: other than sales-related cost (acquisition cost, reinsurance commission)
22222222
2 2 2 2 ---- 3. Underwriting Profit 3. Underwriting Profit 3. Underwriting Profit 3. Underwriting Profit ---- OverallOverallOverallOverall
-14.8bn
-77.2bn
-116.0bn-114.1bn
-87.2bn
105.4%106.3%
105.5%
100.6%
102.8%
FY2004 FY2005 FY2006 FY2007 FY2008
U/W Profit/Loss C/R
105.4%
106.3%105.5%
102.8%
100.8%102.3%
103.3%103.9%
100.7% 100.4%
FY2004 FY2005 FY2006 FY2007 FY2008.2
Meritz Top 4
[Underwriting profit & C/R][Underwriting profit & C/R][Underwriting profit & C/R][Underwriting profit & C/R] [Industry Combined Ratio][Industry Combined Ratio][Industry Combined Ratio][Industry Combined Ratio]
[Premium Mix by Line][Premium Mix by Line][Premium Mix by Line][Premium Mix by Line]
45.3%52.3% 56.6% 61.2% 63.9%
38.9%33.1%
30.8% 27.1% 25.1%
15.8% 14.6% 12.6% 11.7% 11.0%
FY2004 FY2005 FY2006 FY2007 FY2008
Commercial
Auto
Long-term
Note: Before catastrophe reserve
FY08 excludes RG loss, non-deferrable additional acquisition cost (W30.2bn)
23232323
2 2 2 2 ---- 3. Investment3. Investment3. Investment3. Investment
2.82.82.82.8106.2106.2106.2106.2----100.0%100.0%100.0%100.0%14.2%14.2%14.2%14.2%4,138.34,138.34,138.34,138.3Investment assetsInvestment assetsInvestment assetsInvestment assets
-0.3-1.44.9%p16.0%64.7%662.4Real estateReal estateReal estateReal estate
6.430.72.0%p13.7%33.3%568.8LoansLoansLoansLoans
-3.2-2.40.5%p2.2%48.0%89.8OtherOtherOtherOther
-8.8-32.22.7%p10.3%54.8%427.4Overseas securitiesOverseas securitiesOverseas securitiesOverseas securities
2.914.8-1.8%p12.5%-0.3%516.6Investment fundsInvestment fundsInvestment fundsInvestment funds
2.6%6.70.6%p6.9%24.9%285.7StockStockStockStock
5.7%79.6-9.1%p32.6%-10.7%1,349.3Domestic bondDomestic bondDomestic bondDomestic bond
4.8%10.40.2%p5.8%18.6%238.3Cash & equivalentsCash & equivalentsCash & equivalentsCash & equivalents
yoyyoyYieldYieldYieldYieldIncomeIncomeIncomeIncome
% in portfolio% in portfolio% in portfolio% in portfolioAssetAssetAssetAsset(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
[Investment income excluding one[Investment income excluding one[Investment income excluding one[Investment income excluding one----off items]off items]off items]off items]
166.4
4.4%-60.2bn-8.9bn-4.9bn-38.6bn-7.8bn
106.2bn
2.8%
SubSubSubSub----totaltotaltotaltotalAsset Asset Asset Asset
revaluationrevaluationrevaluationrevaluation
Credit Credit Credit Credit
enhancementenhancementenhancementenhancementWriteWriteWriteWrite----offoffoffoffRedemptionRedemptionRedemptionRedemption
Before Before Before Before
oneoneoneone----off off off off
itemitemitemitem
OneOneOneOne----off itemoff itemoff itemoff item
FY08FY08FY08FY08
liquidity managementliquidity managementliquidity managementliquidity management
lowlowlowlow----risk assets W285.4bnrisk assets W285.4bnrisk assets W285.4bnrisk assets W285.4bn
(principal protected notes, etc)(principal protected notes, etc)(principal protected notes, etc)(principal protected notes, etc)
Asset revaluation W235.4bnAsset revaluation W235.4bnAsset revaluation W235.4bnAsset revaluation W235.4bn
[FY08 Investment][FY08 Investment][FY08 Investment][FY08 Investment]
24242424
2 2 2 2 ---- 3. Investment (1)3. Investment (1)3. Investment (1)3. Investment (1)
[Investment [Investment [Investment [Investment –––– Movement Analysis]Movement Analysis]Movement Analysis]Movement Analysis]
----60.2 60.2 60.2 60.2 bnbnbnbn
179.2
5.6%
106.2106.2106.2106.2
2.8%2.8%2.8%2.8%
-38.6
-7.8-4.9
-8.9
29.2 -42.0
average
asset
W569bn↑
without
one-off items
1.2%p↓ yoy
FY07FY07FY07FY07 OverseasOverseasOverseasOverseas
investmentinvestmentinvestmentinvestment
writewritewritewrite----offoffoffoff
OverseasOverseasOverseasOverseasinvestmentinvestmentinvestmentinvestment
credit credit credit credit enhancementenhancementenhancementenhancement
AssetAssetAssetAsset
revaluationrevaluationrevaluationrevaluationSize effectSize effectSize effectSize effect Yield dropYield dropYield dropYield drop FY08FY08FY08FY08OverseasOverseasOverseasOverseas
investmentinvestmentinvestmentinvestment
redemptionredemptionredemptionredemption
25252525
2 2 2 2 ---- 3. Investment (2)3. Investment (2)3. Investment (2)3. Investment (2)
[Investment: peer group analysis][Investment: peer group analysis][Investment: peer group analysis][Investment: peer group analysis]
5.3%
6.3%6.0%
6.4%
5.9%5.6%
4.7%
5.4%
5.9%
5.3% 5.4% 5.4%5.0%
3.0%
FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008.2
Meritz Top 4 1.2
0.4
MeritzMeritzMeritzMeritz Top 4Top 4Top 4Top 4
[FY02~FY08 Average Investment Yield][FY02~FY08 Average Investment Yield][FY02~FY08 Average Investment Yield][FY02~FY08 Average Investment Yield]
[FY02~FY08 Volatility of Investment Yield][FY02~FY08 Volatility of Investment Yield][FY02~FY08 Volatility of Investment Yield][FY02~FY08 Volatility of Investment Yield]
Note: FY08 = Apr 2008~Feb 2009 data; volatility is standard deviation
5.5 5.3
MeritzMeritzMeritzMeritz Top 4Top 4Top 4Top 4
Note: Figures for FY08 are cumulative data over Apr 2008~Feb 2009
26262626
2 2 2 2 ---- 3. Investment (3)3. Investment (3)3. Investment (3)3. Investment (3)
� FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:�� FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:FY08 investment yield plummets due to:
-2.9%4.5%Top 4
-9.5%7.6%Meritz
FY08
yield
FY08
starting balance
[Overseas investment][Overseas investment][Overseas investment][Overseas investment]
6.6%1.2%Top 4
0.8%9.4%Meritz
FY08
yield
FY08
starting balance
[Trading securities excluding overseas investment][Trading securities excluding overseas investment][Trading securities excluding overseas investment][Trading securities excluding overseas investment]
1) high concentration of overseas investment1) high concentration of overseas investment1) high concentration of overseas investment1) high concentration of overseas investment
(lower investment yield)(lower investment yield)(lower investment yield)(lower investment yield)
1) high concentration of overseas investment1) high concentration of overseas investment1) high concentration of overseas investment1) high concentration of overseas investment
(lower investment yield)(lower investment yield)(lower investment yield)(lower investment yield)
2) securities classified into trading securities,2) securities classified into trading securities,2) securities classified into trading securities,2) securities classified into trading securities,
where profit directly related to bottom linewhere profit directly related to bottom linewhere profit directly related to bottom linewhere profit directly related to bottom line
2) securities classified into trading securities,2) securities classified into trading securities,2) securities classified into trading securities,2) securities classified into trading securities,
where profit directly related to bottom linewhere profit directly related to bottom linewhere profit directly related to bottom linewhere profit directly related to bottom line
Note: yield: Feb 2009
27272727
2 2 2 2 ---- 3. Investment (4)3. Investment (4)3. Investment (4)3. Investment (4)
[FY08 bad asset clearance][FY08 bad asset clearance][FY08 bad asset clearance][FY08 bad asset clearance]
●●●● HighHighHighHigh----risk overseas securities: redemption, writerisk overseas securities: redemption, writerisk overseas securities: redemption, writerisk overseas securities: redemption, write----off, and credit enhancementoff, and credit enhancementoff, and credit enhancementoff, and credit enhancement
151.4
203.4
-3.3
-47.6
3.4
-43.9
34.3
7.4
-2.3
ChangeChangeChangeChange
-427.4276.1Total
98.6%203.40Korean Paper
97.7%60.163.3Simple
structured
85.7%23.471.0Note
100.0%8.45.0PEF
98.1%34.778.6Fund
74.8%71.036.7CLN-FTD
64.7%22.815.4CLN-SCDO
125.5%3.76.0CDO/CLO
NAVNAVNAVNAVMar Mar Mar Mar ’’’’09090909Mar Mar Mar Mar ’’’’08080808
AssetAssetAssetAsset(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
Note) NAV : net asset value
40.9
60.4
94.9
59.5
67.9
36.4
66.9
77.1
Mar 08 Sep Dec Nov Dec Jan 09 Feb Mar
AFS valuation loss
Write-off : CDO/CLO 20.5bn,
CLN-SCDO 15.9bn,
CLN-FTD 5bn credit change,
Fund 6.7, Note 1.1 redemption
Purchase collateral
bond of CLN-FTD
(CLN-SCDO 9.9bn↑)
Purchase
CLN-SCDO
21.9bn
28282828
2 2 2 2 ---- 3. Investment (5)3. Investment (5)3. Investment (5)3. Investment (5)
[FY08 bad asset clearance][FY08 bad asset clearance][FY08 bad asset clearance][FY08 bad asset clearance]
●●●● Trading securities
●●●● Fixed income asset
-220.5249.1469.6TotalTotalTotalTotal
3.364.060.7OthersOthersOthersOthers
Mar Mar Mar Mar ’’’’09090909
BondBondBondBond
-119.09.6128.6OverseasOverseasOverseasOverseas
-94.6175.5270.1Investment
funds
-0.500.5StockStockStockStock
-9.709.7
ChangeChangeChangeChangeMar Mar Mar Mar ’’’’08080808(Wbn)(Wbn)(Wbn)(Wbn)A.I. : 63.2bn
MMF : 112.3bn
Redemption completed : 10.6bn
Maturity schedule: May09 : 6.7 / June : 7.2 / July : 10
Aug : 10 / Dec : 5
Jul 2010 : 14.4
Redemption completed : 27.4bnAug 09 maturity: 10.7bn
Jan 12 maturity : 19.2bn
In the process : 5.8bn
-
-
-
-
-
6.06%
yieldyieldyieldyield(Unit: KRW (Unit: KRW (Unit: KRW (Unit: KRW bnbnbnbn))))
Total investment assetTotal investment assetTotal investment assetTotal investment asset
Equity-method & real estate
SubSubSubSub----totaltotaltotaltotal
-
-
-
100%
-
100%
0.1%p
0.9%p
-5.6%p
4.6%p
MixMixMixMix
1.3%
10.2%
4.1%
84.4%
MixMixMixMix
1.2%
9.3%
9.7%
79.8%
MixMixMixMix
StockStockStockStock----type assettype assettype assettype asset
Performance-based asset
FixedFixedFixedFixed----income assetincome assetincome assetincome asset
OtherOtherOtherOther
-805.7534.4
244.03,332.63,089.6
6.943.938.3
50.0338.9287.6
-161.0137.9298.9
347.1
ChangeChangeChangeChange
4,138.3
2,811.9
Mar Mar Mar Mar ’’’’09090909
3,624.0
2,464.8
Mar Mar Mar Mar ’’’’08080808
Note: Fixed income = deposit, AFS bond, overseas bond, loan; performance base = trading bond, alternative investment; stock = outsourced investment, trading stock, stock
Income Income Income Income
volatilityvolatilityvolatilityvolatility↓↓↓↓
29292929
� FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2%
---- Deserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2nd----tier average: 190.7%) tier average: 190.7%) tier average: 190.7%) tier average: 190.7%)
�� FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2% FY08 solvency ratio: 190.2%
-------- Deserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2ndDeserves its place in 2nd tier, even with RG loss (2nd--------tier average: 190.7%) tier average: 190.7%) tier average: 190.7%) tier average: 190.7%) tier average: 190.7%) tier average: 190.7%) tier average: 190.7%) tier average: 190.7%)
-19.3%p
-24.9%p
+70.9%p
-45.1%p
-23.1%p
--48.7%p48.7%p235.3%235.3%235.3%235.3%
190.2% 190.2% 190.2% 190.2%
238.9% 238.9% 238.9% 238.9%
2 2 2 2 ---- 4. Solvency4. Solvency4. Solvency4. Solvency
FY07FY07FY07FY07FY07FY07FY07FY07
Share Share Share Share
buybuybuybuy----backbackbackback
Asset Asset Asset Asset
revaluationrevaluationrevaluationrevaluation
FY08FY08FY08FY08FY08FY08FY08FY08
(after RG)(after RG)(after RG)(after RG)(after RG)(after RG)(after RG)(after RG)
AFS/derivativesAFS/derivativesAFS/derivativesAFS/derivatives
valuationvaluationvaluationvaluation
Solvency ratio Solvency ratio Solvency ratio Solvency ratio
excluding RG lossexcluding RG lossexcluding RG lossexcluding RG loss
ㆍㆍㆍㆍㆍㆍㆍㆍSolvency: 662.5bnSolvency: 662.5bnSolvency: 662.5bnSolvency: 662.5bnSolvency: 662.5bnSolvency: 662.5bnSolvency: 662.5bnSolvency: 662.5bn
ㆍㆍㆍㆍㆍㆍㆍㆍSolvency guidance: 281.6bnSolvency guidance: 281.6bnSolvency guidance: 281.6bnSolvency guidance: 281.6bnSolvency guidance: 281.6bnSolvency guidance: 281.6bnSolvency guidance: 281.6bnSolvency guidance: 281.6bn
ㆍㆍㆍㆍㆍㆍㆍㆍSolvency : 614.9 Solvency : 614.9 Solvency : 614.9 Solvency : 614.9 Solvency : 614.9 Solvency : 614.9 Solvency : 614.9 Solvency : 614.9 bnbnbnbnbnbnbnbn
ㆍㆍㆍㆍㆍㆍㆍㆍSolvency guideline : 323.3 Solvency guideline : 323.3 Solvency guideline : 323.3 Solvency guideline : 323.3 Solvency guideline : 323.3 Solvency guideline : 323.3 Solvency guideline : 323.3 Solvency guideline : 323.3 bnbnbnbnbnbnbnbn
yoyyoyyoyyoyyoyyoyyoyyoy
OrganicOrganicOrganicOrganic
growthgrowthgrowthgrowth
effecteffecteffecteffect
RG lossRG lossRG lossRG lossRG lossRG lossRG lossRG loss
30303030
Corporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate Overview
FY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 Review
FY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & Guidance
IssueIssueIssueIssueIssueIssueIssueIssue
Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)
ContentsContentsContentsContentsContentsContentsContentsContents
1111
2222
3333
※※※※
4444
31313131
3 3 3 3 ---- 1. Strategy and Targets1. Strategy and Targets1. Strategy and Targets1. Strategy and Targets
Underwriting Company StructureUnderwriting Company Structure
FY08 FY09
EliminateEliminateEliminateEliminateEliminateEliminateEliminateEliminate
uncertaintiesuncertaintiesuncertaintiesuncertaintiesuncertaintiesuncertaintiesuncertaintiesuncertainties
(Risk clearance)(Risk clearance)(Risk clearance)(Risk clearance)(Risk clearance)(Risk clearance)(Risk clearance)(Risk clearance)
Best Best Best Best Best Best Best Best underwritingunderwritingunderwritingunderwritingunderwritingunderwritingunderwritingunderwriting
company company company company company company company company
(Year of new take(Year of new take(Year of new take(Year of new take(Year of new take(Year of new take(Year of new take(Year of new take--------off)off)off)off)off)off)off)off)
StableInvestment
return
StableStableInvestment Investment
returnreturnProfessional
Risk ManagingProfessionalProfessional
Risk ManagingRisk Managing
Under 100%Combined ratioUnder 100%Under 100%Combined ratioCombined ratio
Establishing Solid Profit BaseEstablishing Solid Profit BaseEstablishing Solid Profit BaseEstablishing Solid Profit BaseEstablishing Solid Profit BaseEstablishing Solid Profit BaseEstablishing Solid Profit BaseEstablishing Solid Profit Base
� Newly organized as “solid underwriting company”
⇒ Aiming to be the best underwriting company, rather than “sales at any cost”
� Newly organized as “solid underwriting company”
⇒ Aiming to be the best underwriting company, rather than “sales at any cost”
32323232
3 3 3 3 ---- 2. Sales2. Sales2. Sales2. Sales
0.4%p8.7%11.7%3,2366.5%37,055Total
-3.3%p3.0%-46.1%313.1%100Lump-sum payment
0.4%p9.6%16.8%2,15312.1%22,400
0.4%p9.6%16.9%2,06812.4%21,550Recurring
New contract 0.7%p10.0%12.6%855.3%850LongLongLongLongtermtermtermterm
0.3%p6.9%1.8%740-2.3%10,680AutoAutoAutoAuto
6.2%
G/RG/RG/RG/R
8.8%
M/SM/SM/SM/S
-0.3%p3402.5%3,875CommercialCommercialCommercialCommercial
M/S M/S M/S M/S yoyyoyyoyyoyG/RG/RG/RG/R
MeritzMeritzMeritzMeritzMarketMarketMarketMarket(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
fire, cargo, engineering: shrinking global trade and capex, severe price competition
aviation, casualty/liability: demand from low-end airlines, boost in product liability market
Downside
• Life insurers refocus on protection insurance from financial type
• Falling bancassurance market, burdensome high growth in FY08Downside
• Reallocation of marketing resources from commercial/auto to long-term
• Smoother solicitor recruitment due to recession and unemploymentUpside
LongLongLongLong----termtermtermterm
new contractnew contractnew contractnew contract
• Recession → stagnant car sales
• On-line market expansion Zero or negative growth
• Contribution from ‘hit-and-run’ accident relief fund will be reduced
AutoAutoAutoAuto
UpsideCommercialCommercialCommercialCommercial
Market outlookMarket outlookMarket outlookMarket outlook
33333333
3 3 3 3 ---- 3. Long3. Long3. Long3. Long----term Insurance Loss Ratio (1)term Insurance Loss Ratio (1)term Insurance Loss Ratio (1)term Insurance Loss Ratio (1)
[Long[Long[Long[Long----term premium mix, L/R trend and forecast]term premium mix, L/R trend and forecast]term premium mix, L/R trend and forecast]term premium mix, L/R trend and forecast]
Note: Based on net premium written
L/RL/RL/RL/RMixMixMixMix
RiskRiskRiskRiskLoadingLoadingLoadingLoading SavingsSavingsSavingsSavings
89.5%84.8%
82.3%78.6%
FY2005FY2005FY2005FY2005 FY2006FY2006FY2006FY2006 FY2007FY2007FY2007FY2007 FY2008FY2008FY2008FY2008 FY2009FY2009FY2009FY2009
82.2%
80.6%80.6%80.6%80.6%
78.2%77.1%
80.5%
108.8% 101.5%101.5%101.5%101.5%106.8% 106.7% 102.9%
14.4%
13.4%
72.2%
16.3%
15.7%
68.0%
18.1%
16.9%
64.9%
19.5%
19.0%
61.5%
20.1%
20.9%
59.0%
76.7%76.7%76.7%76.7%
34343434
3 3 3 3 ---- 3. Long3. Long3. Long3. Long----term Insurance Loss Ratio (2)term Insurance Loss Ratio (2)term Insurance Loss Ratio (2)term Insurance Loss Ratio (2)
[Long[Long[Long[Long----term risk premium loss ratio trend and forecast]term risk premium loss ratio trend and forecast]term risk premium loss ratio trend and forecast]term risk premium loss ratio trend and forecast]
80.6%80.5%77.1%78.2%82.2%Loss ratioNet premium written
81.0%80.8%77.6%78.8%82.7%Loss ratioGross premium total
3.1%4.6%3.8%8.1%6.2%Loss ratioIBNR
4.0%3.5%4.3%5.2%9.7%Loss ratioHigh claim
73.9%72.7%69.6%65.5%66.8%Loss ratioSub-total
83.1%81.0%78.2%75.0%74.0%Loss ratioRecurring
(2nd year~)
53.8%54.5%55.1%51.2%54.5%Loss ratio
31.4%33.8%37.3%40.0%37.0%Premium
portion1st year
Ordinary
claim
Gross
premium
FY09FY09FY09FY09FY08FY08FY08FY08FY07FY07FY07FY07FY06FY06FY06FY06FY05FY05FY05FY05
35353535
[Long[Long[Long[Long----term savings premium loss ratio trend and forecast]term savings premium loss ratio trend and forecast]term savings premium loss ratio trend and forecast]term savings premium loss ratio trend and forecast]
Funding Funding Funding Funding
costcostcostcost
ReserveReserveReserveReserve
mixmixmixmixReserveReserveReserveReserve
Funding Funding Funding Funding
costcostcostcost
ReserveReserveReserveReserve
mixmixmixmixReserveReserveReserveReserve
Funding Funding Funding Funding
costcostcostcost
ReserveReserveReserveReserve
mixmixmixmixReserveReserveReserveReserve
4.97%
4.50%
4.23%
5.63%
7.32%
3.90%
----
100.0%
83.9%
16.1%
6.8%
9.3%
----
100.0%
76.6%
23.4%
13.6%
9.8%
FY07FY07FY07FY07
FixedFixedFixedFixed
~ 4.5%
Average rateAverage rateAverage rateAverage rate
(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
4.44%------------4.81%----
4.37%3,858.2100.0%3,262.74.80%2,797.1TotalTotalTotalTotal
4.20%3,237.080.7%2,633.54.45%2,141.4FloatingFloatingFloatingFloating
5.26%621.219.3%629.15.95%655.6Sub-total
7.25%263.19.8%318.17.44%381.0Over
4.5%
3.80%358.09.5%311.03.88%274.6
FY09FY09FY09FY09FY08FY08FY08FY08
� Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% →→→→ 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : ----0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% →→→→ 4.44%)4.44%)4.44%)4.44%)
� Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps →→→→ interest cost savings interest cost savings interest cost savings interest cost savings 19bn 19bn 19bn 19bn →→→→ change in change in change in change in L/R: L/R: L/R: L/R: ----1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% →→→→ 101.5%)101.5%)101.5%)101.5%)
�� Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% Floating portion: +3.2%p ( 80.7% →→→→→→→→ 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : 83.9%) / average rate : --------0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% 0.53%p ( 4.97% →→→→→→→→ 4.44%)4.44%)4.44%)4.44%)4.44%)4.44%)4.44%)4.44%)
�� Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps Average rate drop 53bps →→→→→→→→ interest cost savings interest cost savings interest cost savings interest cost savings 19bn 19bn 19bn 19bn 19bn 19bn 19bn 19bn →→→→→→→→ change in change in change in change in L/R: L/R: L/R: L/R: L/R: L/R: L/R: L/R: --------1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% 1.4%p ( 102.9% →→→→→→→→ 101.5%)101.5%)101.5%)101.5%)101.5%)101.5%)101.5%)101.5%)
3 3 3 3 ---- 3. Long3. Long3. Long3. Long----term Insurance Loss Ratio (3)term Insurance Loss Ratio (3)term Insurance Loss Ratio (3)term Insurance Loss Ratio (3)
36363636
3 3 3 3 ---- 3. Auto Loss Ratio 3. Auto Loss Ratio 3. Auto Loss Ratio 3. Auto Loss Ratio
6.0%
10.7%
4.0%
1.5%
6.8%
2.8%
5.7%
13.3%
FY2006 FY2007 FY2008 FY2009
Average rate G/ R(gross premium)
Average rate G/ R(earned premium)75.1%
78.5%
69.9% 70.0%
74.2%
5.7%
13.3%
6.8%
9.3%
0.5% 2.8%
3.1%2.9%
8.2%
1.6%
FY2005 FY2006 FY2007 FY2008 FY2009
L/R
Average rate
Loss cost
1.5%4.0%10.7%6.0%Average Average Average Average
premium premium premium premium
-1.0%---Auto
accident relief fund
2.5%3.0%1.7%0.4%OthersOthersOthersOthers
-1.0%8.9%5.6%
Rate adjustme
nt
FY09FY09FY09FY09FY08FY08FY08FY08FY07FY07FY07FY07FY06FY06FY06FY06FactorsFactorsFactorsFactors
� Loss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scale
� 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio
→→→→ Target for Target for Target for Target for MeritzMeritzMeritzMeritz at the same timeat the same timeat the same timeat the same time
�� Loss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scaleLoss cost not expected to change in big scale
�� 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio 70% or less is achievable loss ratio
→→→→→→→→ Target for Target for Target for Target for Target for Target for Target for Target for MeritzMeritzMeritzMeritzMeritzMeritzMeritzMeritz at the same timeat the same timeat the same timeat the same timeat the same timeat the same timeat the same timeat the same time
[Premium rate per unit: 1.5% up][Premium rate per unit: 1.5% up][Premium rate per unit: 1.5% up][Premium rate per unit: 1.5% up]
[Average rate : 2.8% up][Average rate : 2.8% up][Average rate : 2.8% up][Average rate : 2.8% up]
37373737
FY09FY09FY09FY09FY08FY08FY08FY08
Commercial L/RCommercial L/RCommercial L/RCommercial L/R
61.1%
57.5%57.5%57.5%57.5%
3.6%p3.6%p3.6%p3.6%p↓↓↓↓
※ FY08: excluding RG loss
3 3 3 3 ---- 3. Commercial Insurance Loss Ratio3. Commercial Insurance Loss Ratio3. Commercial Insurance Loss Ratio3. Commercial Insurance Loss Ratio
� Stable casualty line loss ratioStable casualty line loss ratioStable casualty line loss ratioStable casualty line loss ratio
� Stabilizing forex ratesStabilizing forex ratesStabilizing forex ratesStabilizing forex rates
� Stop underwriting overseas Stop underwriting overseas Stop underwriting overseas Stop underwriting overseas inwardinwardinwardinward treatytreatytreatytreaty
� Portfolio review for group casualty linePortfolio review for group casualty linePortfolio review for group casualty linePortfolio review for group casualty line
Reasons for lower commercial loss ratioReasons for lower commercial loss ratioReasons for lower commercial loss ratioReasons for lower commercial loss ratioReasons for lower commercial loss ratioReasons for lower commercial loss ratioReasons for lower commercial loss ratioReasons for lower commercial loss ratio
38383838
3 3 3 3 ---- 3. Sales Cost3. Sales Cost3. Sales Cost3. Sales Cost
45.3%33.5% 28.4%
21.5%
17.6%
22.1%23.9%
30.9% 34.8%
12.4%14.9% 17.6% 19.4%
24.8% 29.5% 30.1% 28.2%
FY2005 FY2006 FY2007 FY2008 FY2009
FC
TC
GA
Other
s
h=g-e
g
f
e=d-c
d
c=a-b
b
a
25.930.20Overflow
464.3408.4317.9Acquisition cost to be
deferred
467.1410.7319.0Acquisition cost incurred
438.3378.1325.5Deferrable amount
515.4
189.9
166.1
356.0
FY07FY07FY07FY07
347.0267.5After amortization DAC
785.3
298.6
645.6
FY09(e)FY09(e)FY09(e)FY09(e)
Limit to defer
Amortization (excluding overflow amount)
Starting unamortized DAC
(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
645.6
234.7
502.2
FY08FY08FY08FY08
Net premium method reserve – cancellation method reserve
Term amortization from normal contract
Lump-sum amortization from cancellation
CommentCommentCommentComment
[LT sales cost (overflow[LT sales cost (overflow[LT sales cost (overflow[LT sales cost (overflow----amortization)]amortization)]amortization)]amortization)]
[New contract [New contract [New contract [New contract mixmixmixmix by line]by line]by line]by line]
47.1%
18.1%
39393939
3 3 3 3 ---- 3. Administration Cost3. Administration Cost3. Administration Cost3. Administration Cost
+9.1
+4.8
+16.3
-12.5
ChangeChangeChangeChange
-1.0%10.9%11.9%2.9%320.5311.5AdministrationAdministrationAdministrationAdministration
+0.1%0.6%0.5%37.5%17.512.7Other
-0.1%5.4%5.5%11.3%160.3144.0General admin
-1.1%4.9%6.0%-8.0%142.7155.2Wages
GapGapGapGapG/RG/RG/RG/R
FY09FY09FY09FY09FY08FY08FY08FY08
FY09FY09FY09FY09FY08FY08FY08FY08
Expense ratioExpense ratioExpense ratioExpense ratioExpenseExpenseExpenseExpense
( Unit: Wbn )( Unit: Wbn )( Unit: Wbn )( Unit: Wbn )
� Wages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (freeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, change
in severance scheme (progressivein severance scheme (progressivein severance scheme (progressivein severance scheme (progressive→→→→ single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% ↓↓↓↓))))
� General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs
�� Wages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (frWages: to be reduced via cooperation of management and labor (freeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, changeeeze on FY09 salaries, change
in severance scheme (progressivein severance scheme (progressivein severance scheme (progressivein severance scheme (progressivein severance scheme (progressivein severance scheme (progressivein severance scheme (progressivein severance scheme (progressive→→→→→→→→ single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% single), expense ratio 1.1% ↓↓↓↓↓↓↓↓))))))))
�� General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1General administration: gen admin expense ratio to decrease 0.1%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs%p on lower fixed costs
[FY09 administration costs][FY09 administration costs][FY09 administration costs][FY09 administration costs]
40404040
3 3 3 3 ---- 3. Investment3. Investment3. Investment3. Investment
� Focus on fixedFocus on fixedFocus on fixedFocus on fixed----income asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment income
� PerforPerforPerforPerformance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudently invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economy
�� Focus on fixedFocus on fixedFocus on fixedFocus on fixedFocus on fixedFocus on fixedFocus on fixedFocus on fixed--------income asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment incomeincome asset for stable investment income
�� PerforPerforPerforPerforPerforPerforPerforPerformance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudenmance based, stock asset prudently invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economytly invested according to 2H macro economy
→→→→16.6bn/month
→→→→ conservative approach
→→→→ 15.4bn/month
198.84.56%4,779.1Ending bal.
4,138.3Starting bal.Total Total Total Total
investmentinvestmentinvestmentinvestment
14.61.06%1,442.1Ending bal.
1,326.4Starting bal.OtherOtherOtherOther
184.23,337.0Total
13.85.00%525.1New investment
170.46.06%2,811.9Starting balance
Fixed Fixed Fixed Fixed
income income income income
assetassetassetasset
IncomeIncomeIncomeIncomeYieldYieldYieldYieldAssetAssetAssetAsset
41414141
3 3 3 3 ---- 3. P&L3. P&L3. P&L3. P&L
yoyyoyyoyyoy
43.9%p
n.a.
n.a.
n.a.
87.2%
1.8%p
n.a.
-0.6%p
-2.1%p
0.1%p
-132.4%p
-8.3%p
16.6%(0.4%p)
1.8 %(0.3%p)
6.2 %(0.3%p)
11.7 %(0.4%p)
-16.1%27.8%Adjusted ROE
-99.1155.9Adjusted net income
-40.217.1Increase in Catastrophe Reserves
-58.8138.8138.8138.8138.8Net incomeNet incomeNet incomeNet income
106.2
2.8%
198.8
4.6%
Investment income
Yield
Long-term
Auto
Commercial
-186.4-12.0Underwriting income
26.2%25.6%Expense ratio
78.8%76.7%
69.9%70.0%
189.9%57.5%
82.5%74.2%Loss ratio
1,849.6 (9.2%)2,156.2 (9.6 %)Long-term (market share)
726.7 (6.6%)740.0 (6.9 %)Auto (market share)
320.0 (8.5%)340.0 (8.8 %)Commercial (market share)
2,896.4 (8.3%)3,236.2 (8.7 %)Gross premiums (market share)
FY08FY08FY08FY08FY09FY09FY09FY09(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
42424242
3 3 3 3 ---- 3. Balance Sheet3. Balance Sheet3. Balance Sheet3. Balance Sheet
323.311.0%358.8Solvency guideline
614.930.4%801.6Solvency amount
190.2%33.2%p223.4%Solvency margin ratio
-281--32.1Capital adjustment
157.489.3%298.0Retained earnings
234.40.2%234.9Capital surplus
61.90.0%61.9Capital
425.632.2%562.7Total shareholders’ equity
537.48.2%581.6Other liabilities
105.818.6%125.5Catastrophe reserves
4,196.612.1%4,702.4Policy reserves
4,839.811.8%5,409.5Total liabilities
1,127.15.9%1,193.1Non-invested asset
4,138.315.5%4,779.1Investment asset
5,265.513.4%5,972.2Total asset
G/RG/RG/RG/R
FY08FY08FY08FY08FY09 FY09 FY09 FY09 (Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
43434343
3 3 3 3 ---- 3. Profit 3. Profit 3. Profit 3. Profit
[Net income change from FY08 to FY09 ][Net income change from FY08 to FY09 ][Net income change from FY08 to FY09 ][Net income change from FY08 to FY09 ]
FY08FY08FY08FY08FY08FY08FY08FY08 FY09FY09FY09FY09FY09FY09FY09FY09 ChangeChangeChangeChangeLongLongLongLong----term term term term underwriting underwriting underwriting underwriting
profitprofitprofitprofit
Auto Auto Auto Auto
underwriting underwriting underwriting underwriting
profitprofitprofitprofit
InvestmentInvestmentInvestmentInvestment Administration Administration Administration Administration
cost, etc.cost, etc.cost, etc.cost, etc.
Commercial Commercial Commercial Commercial underwriting underwriting underwriting underwriting
profitprofitprofitprofit
FY08FY08FY08FY08FY08FY08FY08FY08
RG lossRG lossRG lossRG lossRG lossRG lossRG lossRG loss
(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)(Unit: Wbn)
----58.858.858.858.8
+49.2+49.2+49.2+49.2 +3.1+3.1+3.1+3.1 +5.8+5.8+5.8+5.8
+92.7+92.7+92.7+92.7 ----78.678.678.678.6
138.8138.8138.8138.8138.8138.8138.8138.8 +197.6+197.6+197.6+197.6
Admin cost -9.1Non-operating -5.6Tax -63.9
+125.4+125.4+125.4+125.4+125.4+125.4+125.4+125.4
Note: Underwriting profit includes sales-related costs
44444444
3 3 3 3 ---- 4. Risk / Return Balance4. Risk / Return Balance4. Risk / Return Balance4. Risk / Return Balance
AdjustedAdjustedAdjustedAdjusted
ROEROEROEROE
Solvency ratioSolvency ratioSolvency ratioSolvency ratioNote: Meritz FY08 adjusted ROE: excluding RG Loss
2nd-tier group FY08 solvency ratio: Dec 08
TARGETTARGETTARGETTARGETTARGETTARGETTARGETTARGET
ZONEZONEZONEZONEZONEZONEZONEZONE
200%200%
15%15%
FY08FY08FY08FY08
FY07
FY08.2FY08.2
•adj. ROE : 9.2%adj. ROE : 9.2%adj. ROE : 9.2%adj. ROE : 9.2%
•Solvency ratio : 190.2%Solvency ratio : 190.2%Solvency ratio : 190.2%Solvency ratio : 190.2%
•adj. ROE : 18.6%adj. ROE : 18.6%adj. ROE : 18.6%adj. ROE : 18.6%
•Solvency ratio : 235.8%Solvency ratio : 235.8%Solvency ratio : 235.8%Solvency ratio : 235.8%
MeritzMeritzMeritzMeritz 2nd2nd2nd2nd----tier grouptier grouptier grouptier group
FY06FY06
•adj. ROE 11.5%adj. ROE 11.5%adj. ROE 11.5%adj. ROE 11.5%
•Solvency ratio 187.1%Solvency ratio 187.1%Solvency ratio 187.1%Solvency ratio 187.1%
FY07FY07
•adj. ROE 27.4%adj. ROE 27.4%adj. ROE 27.4%adj. ROE 27.4%
•Solvency ratio 201.1%Solvency ratio 201.1%Solvency ratio 201.1%Solvency ratio 201.1%
•adj. ROE 24.6%adj. ROE 24.6%adj. ROE 24.6%adj. ROE 24.6%
•Solvency ratio 189.3%Solvency ratio 189.3%Solvency ratio 189.3%Solvency ratio 189.3%
FY09FY09FY09FY09FY09FY09FY09FY09
•adj. ROE : adj. ROE : adj. ROE : adj. ROE : 27.8%27.8%27.8%27.8%
•Solvency ratio : Solvency ratio : Solvency ratio : Solvency ratio : 223.4%223.4%223.4%223.4%
45454545
ContentsContentsContentsContentsContentsContentsContentsContents
Corporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate Overview
FY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 Review
FY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & Guidance
IssueIssueIssueIssueIssueIssueIssueIssue
Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)
1111
2222
3333
※※※※
4444
46464646
3 insolvent
companies
3 normal
companies
� C& Heavy: 8 ships (RG exposure: US$28.2 mn)
� Jinse: 6 ships (RG exposure: US$86.6mn)
� Asia Heavy: 3 ships (RG exposure: US$15.9mn)
� Sekwang Heavy: 13 ships (RG exposure US$34.1mn)
� Sekwang Shipbuilding : 6 ships (RG exposure US$52.3mn)
� Orient: 3 ships (RG exposure US$4.2mn)
OurOurOurOur
RG ExposureRG ExposureRG ExposureRG Exposure
““““6 ship builders6 ship builders6 ship builders6 ship builders
US$215.7mn US$215.7mn US$215.7mn US$215.7mn ””””
☞☞☞☞ 6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according to their risk levelo their risk levelo their risk levelo their risk level☞☞☞☞☞☞☞☞ 6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according t6 shipbuilders holding RG insurance, closely managed according to their risk levelo their risk levelo their risk levelo their risk levelo their risk levelo their risk levelo their risk levelo their risk level
“Insolvent 3” total: 17 ships (RG exposure: US$130.7mn)
“Normal 3” total : 22 ships (RG Exposure : US$90.6mn)
☞☞☞☞ As of Mar 09, insolvent 3 recorded as losses As of Mar 09, insolvent 3 recorded as losses As of Mar 09, insolvent 3 recorded as losses As of Mar 09, insolvent 3 recorded as losses (W181.7bn)(W181.7bn)(W181.7bn)(W181.7bn) assuming total claimassuming total claimassuming total claimassuming total claim
Refund GuaranteeRefund GuaranteeRefund GuaranteeRefund Guarantee
47474747
105.2Paid installment
14.6Escrow account balance
90.6Total Exposure
Launched
Keel-laid
15.215.215.215.2
33.2
42.2
Risk exposure
Actual exposureActual exposureActual exposureActual exposure
(as of Mar 2009, US$mn)
Risk exposure by construction stagesRisk exposure by construction stagesRisk exposure by construction stages
Normal 3 companiesNormal 3 companies’’ RG exposure and forecastRG exposure and forecast
Risk exposure forecastRisk exposure forecastRisk exposure forecast
(Unit: USD mn)
154.1154.1154.1154.1
130.7130.7130.7130.7141.3141.3141.3141.3
105.2105.2105.2105.2111.3111.3111.3111.3 113.4113.4113.4113.4
81.381.381.381.3
64.664.664.664.6
28.928.928.928.9
'08.12 '09.01 '09.02 '09.03 '09.04 '09.05 '09.06 '09.09 '09.12 '10.03
Refund GuaranteeRefund GuaranteeRefund GuaranteeRefund Guarantee
204.3
172.9
186.8
152.7
159.6
151.9
101.7
77.1
33.88.0
1.6
Total exposure
Paid installment
48484848
Q & AQ & AQ & AQ & A
49494949
ContentsContentsContentsContentsContentsContentsContentsContents
Corporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate OverviewCorporate Overview
FY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 ReviewFY08 Review
FY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & GuidanceFY09 Forecast & Guidance
IssuesIssuesIssuesIssuesIssuesIssuesIssuesIssues
Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)Appendix (FY08 Financials)
1111
2222
3333
※※※※
4444
50505050
16.2%2,18016.2%2,53414.3%14.3%14.3%14.3%100.0%100.0%100.0%100.0%2,8962,8962,8962,896Total
-47.1%11-30.4%8----26.7%26.7%26.7%26.7%0.2%0.2%0.2%0.2%6666Lump-sum payment
27.5%1,17126.6%1,48319.3%19.3%19.3%19.3%61.1%61.1%61.1%61.1%1,7691,7691,7691,769Recurring
25.7%5318.7%6320.7%20.7%20.7%20.7%2.6%2.6%2.6%2.6%76767676New
27.4%1,22426.2%1,54519.3%19.3%19.3%19.3%63.7%63.7%63.7%63.7%1,8441,8441,8441,844Long-term
8.0%6722.1%6866.0%6.0%6.0%6.0%25.1%25.1%25.1%25.1%727727727727Auto
0.1%2748.0%2968.2%8.2%8.2%8.2%11.0%11.0%11.0%11.0%320320320320Commercial
G/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/Rmixmixmixmix
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08(Wbn)(Wbn)(Wbn)(Wbn)
0.1%p8.9%0.9%p9.8%----0.5%p0.5%p0.5%p0.5%p9.3%9.3%9.3%9.3%New
0.1%p8.1%0.1%p8.2%0.1%p0.1%p0.1%p0.1%p8.3%8.3%8.3%8.3%Total
-11.8%p7.1%-1.3%p5.8%0.5%p0.5%p0.5%p0.5%p6.3%6.3%6.3%6.3%Lump-sum payment
0.5%p8.6%0.4%p9.0%0.2%p0.2%p0.2%p0.2%p9.2%9.2%9.2%9.2%Recurring
0.7%p8.6%0.4%p9.0%0.2%p0.2%p0.2%p0.2%p9.2%9.2%9.2%9.2%Long-term
-7.3%-0.7%p6.6%----6.6%6.6%6.6%6.6%Auto
-0.8%p8.5%0.2%p8.7%----0.2%p0.2%p0.2%p0.2%p8.5%8.5%8.5%8.5%Commercial
G/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/R
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08Market shareMarket shareMarket shareMarket share
* FY08 market share: preliminary figure
Appendix: sales Appendix: sales Appendix: sales Appendix: sales
51515151
----3.4%p3.4%p3.4%p3.4%p
15.1%15.1%15.1%15.1%
10.2%10.2%10.2%10.2%
2.5%p2.5%p2.5%p2.5%p
3.5%p3.5%p3.5%p3.5%p
----3.8%p3.8%p3.8%p3.8%p
19.7%19.7%19.7%19.7%
14.2%14.2%14.2%14.2%
----4.3%p4.3%p4.3%p4.3%p
5.0%5.0%5.0%5.0%
----1.1%1.1%1.1%1.1%
1.3%p1.3%p1.3%p1.3%p
11.6%11.6%11.6%11.6%
15.1%15.1%15.1%15.1%
G/RG/RG/RG/R
75.5%75.5%75.5%75.5%
2,6102,6102,6102,610
1,9711,9711,9711,971
75.3%75.3%75.3%75.3%
80.6%80.6%80.6%80.6%
78.8%78.8%78.8%78.8%
1,7961,7961,7961,796
1,4151,4151,4151,415
69.9%69.9%69.9%69.9%
673673673673
470470470470
61.1%61.1%61.1%61.1%
141141141141
86868686
(before (before (before (before RG)RG)RG)RG)
-0.8%p81.1%-2.2%p78.9%3.6%p3.6%p3.6%p3.6%p82.5%82.5%82.5%82.5%Loss ratio
18.2%1,89619.6%2,26715.1%15.1%15.1%15.1%2,6102,6102,6102,610Earned premium
17.1%1,53816.3%1,78820.3%20.3%20.3%20.3%2,1532,1532,1532,153Losses
Total
-7.9%p69.8%3.0%p72.8%2.5%p2.5%p2.5%p2.5%p75.3%75.3%75.3%75.3%LT risk L/R (excluding IBNR)
-4.9%p78.2%-1.1%p77.1%3.5%p3.5%p3.5%p3.5%p80.6%80.6%80.6%80.6%LT risk L/R (including IBNR)
-4.5%p84.9%-2.3%p82.6%----3.8%p3.8%p3.8%p3.8%p78.8%78.8%78.8%78.8%Loss ratio
26.4%1,19325.8%1,50119.7%19.7%19.7%19.7%1,7961,7961,7961,796Earned premium
20.1%1,01322.2%1,23814.2%14.2%14.2%14.2%1,4151,4151,4151,415Losses
Long-term
3.4%p78.5%-4.3%p74.2%----4.3%p4.3%p4.3%p4.3%p69.9%69.9%69.9%69.9%Loss ratio
6.7%5977.5%6415.0%5.0%5.0%5.0%673673673673Earned premium
11.5%4681.6%476----1.1%1.1%1.1%1.1%470470470470Losses
Auto
3.9%p53.0%6.8%p59.8%131.1%p131.1%p131.1%p131.1%p189.9%189.9%189.9%189.9%Loss ratio
4.8%10617.4%12511.6%11.6%11.6%11.6%141141141141Earned premium
13.3%5632.5%75258.0%258.0%258.0%258.0%268268268268Losses
Commercial
G/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/R(after RG)(after RG)(after RG)(after RG)
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08
(Wbn)(Wbn)(Wbn)(Wbn)
Appendix: loss ratioAppendix: loss ratioAppendix: loss ratioAppendix: loss ratio
52525252
-0.9%p105.4%-2.6%p102.8%5.9%p5.9%p5.9%p5.9%p108.7%108.7%108.7%108.7%Combined ratio
-0.1%p24.3%-0.4%p23.9%2.3%p2.3%p2.3%p2.3%p26.2%26.2%26.2%26.2%Expense ratio
22.0%1,94317.9%2,29114.9%14.9%14.9%14.9%2,6312,6312,6312,631Net premium written
18.2%1,89619.6%2,26715.1%15.1%15.1%15.1%2,6102,6102,6102,610Gross premium earned
18.0%46117.5%54226.1%26.1%26.1%26.1%684684684684Net expenses
-6.1%495.0%523.1%3.1%3.1%3.1%53535353Expenses recovered
22.8%1921.8%2412.7%12.7%12.7%12.7%27272727Other expenses
20.9%24719.9%29738.7%38.7%38.7%38.7%411411411411Sales-related
3.1%11212.5%12614.3%14.3%14.3%14.3%144144144144Administrative
15.2%13212.0%1484.9%4.9%4.9%4.9%155155155155Wages & benefits
15.2%51016.3%59424.1%24.1%24.1%24.1%737737737737Expenses
G/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/R
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08(Wbn)(Wbn)(Wbn)(Wbn)
Appendix: expense ratioAppendix: expense ratioAppendix: expense ratioAppendix: expense ratio
Note: Sales-related expenses: acquisition cost/collection fees, commissions paid to agencies, acquisition cost, amortization, deferred acquisition cost, etc
Other expenses: loss adjustment expenses, co-insurance paid, reinsurance commission paid, etc
Expenses recovered: claim service fee recovered, R/I commission received, etc
53535353
100.0%1,235100.0%1,553100.0%100.0%100.0%100.0%1,8501,8501,8501,850Total
16.8%20815.4%23913.8%13.8%13.8%13.8%256256256256Savings
0.0%0.40.0%0.40.0%0.0%0.0%0.0%0.30.30.30.3Corporate pension
4.5%563.9%613.6%3.6%3.6%3.6%66666666Personal annuities
2.9%352.8%442.5%2.5%2.5%2.5%47474747Bundle
16.2%20012.6%1969.0%9.0%9.0%9.0%167167167167Disease
13.2%16310.5%1638.7%8.7%8.7%8.7%162162162162Property
20.5%25317.9%27815.8%15.8%15.8%15.8%292292292292Drivers
25.8%31936.8%57146.5%46.5%46.5%46.5%859859859859Accident
78.6%97180.7%1,25382.6%82.6%82.6%82.6%1,5271,5271,5271,527Protection-type
mixmixmixmixFY06FY06FY06FY06mixmixmixmixFY07FY07FY07FY07mixmixmixmixFY08 FY08 FY08 FY08 (Wbn)(Wbn)(Wbn)(Wbn)
2.8%p63.3%-0.1%p63.2%----0.9%p0.9%p0.9%p0.9%p62.3%62.3%62.3%62.3%25th month persistency
0.2%p76.4%2.8%p79.2%----4.4%p4.4%p4.4%p4.4%p74.8%74.8%74.8%74.8%13th month persistency
65.6%81062.7%97359.7%59.7%59.7%59.7%1,1041,1041,1041,104Savings premiums
34.4%42537.3%58040.3%40.3%40.3%40.3%746746746746Risk+loading premiums
Appendix: longAppendix: longAppendix: longAppendix: long----term product portfolioterm product portfolioterm product portfolioterm product portfolio
* Including lump-sum payment, FY08 persistency is based on Feb 09 data
54545454
G/RG/RG/RG/R G/RG/RG/RG/R
CategoryCategoryCategoryCategory
FY08FY08FY08FY08 FY07FY07FY07FY07 FY06FY06FY06FY06
LossLossLossLoss
ratioratioratioratio
PremiumPremiumPremiumPremium
mixmixmixmix
LossLossLossLoss
ratioratioratioratio
PremiumPremiumPremiumPremium
mixmixmixmix
LossLossLossLoss
ratioratioratioratio
PremiumPremiumPremiumPremium
mixmixmixmix
Death coverage 33.7%33.7%33.7%33.7% ----6.9%p6.9%p6.9%p6.9%p 24.5%24.5%24.5%24.5% ----2.1%p2.1%p2.1%p2.1%p 40.6% 26.6% 44.6% 28.2%
Life benefits 101.6%101.6%101.6%101.6% 4.4%p4.4%p4.4%p4.4%p 57.7%57.7%57.7%57.7% 3.0%p3.0%p3.0%p3.0%p 97.2% 54.7% 94.4% 51.2%
Medical treatment 107.1%107.1%107.1%107.1% 9.3%p9.3%p9.3%p9.3%p 31.7%31.7%31.7%31.7% 2.5%p2.5%p2.5%p2.5%p 97.8% 29.2% 98.6% 26.6%
Daily allowance 94.1%94.1%94.1%94.1% 2.9%p2.9%p2.9%p2.9%p 13.5%13.5%13.5%13.5% 0.6%p0.6%p0.6%p0.6%p 91.2% 12.9% 93.9% 11.6%
Disease 98.6%98.6%98.6%98.6% ----4.8%p4.8%p4.8%p4.8%p 8.5%8.5%8.5%8.5% ----0.2%p0.2%p0.2%p0.2%p 103.4% 8.7% 91.4% 9.8%
Other 90.1%90.1%90.1%90.1% ----8.4%p8.4%p8.4%p8.4%p 4.0%4.0%4.0%4.0% 0.2%p0.2%p0.2%p0.2%p 98.5% 3.8% 70.9% 3.1%
Property/other 52.3%52.3%52.3%52.3% 0.2%p0.2%p0.2%p0.2%p 17.8%17.8%17.8%17.8% ----0.9%p0.9%p0.9%p0.9%p 52.1% 18.7% 47.5% 20.7%
Total 76.2%76.2%76.2%76.2% 2.5%p2.5%p2.5%p2.5%p 100.0%100.0%100.0%100.0% ---- 73.7% 100.0% 70.7% 100.0%
Appendix: longAppendix: longAppendix: longAppendix: long----term coverage portfolioterm coverage portfolioterm coverage portfolioterm coverage portfolio
* Loss Ratio: As of Gross Premiums Written, excluding IBNR
* 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
55555555
G/RG/RG/RG/R G/RG/RG/RG/R
-5.9%-5.6%--------2.8%p2.8%p2.8%p2.8%p2.8%2.8%2.8%2.8%Investment yield
100.0%3,000100.0%3,624----100.0%100.0%100.0%100.0%14.2%14.2%14.2%14.2%4,1384,1384,1384,138Investment assets
12.5%37611.1%4024.9%p4.9%p4.9%p4.9%p16.0%16.0%16.0%16.0%64.6%64.6%64.6%64.6%662662662662Real estate
16.3%48911.8%4271.9%p1.9%p1.9%p1.9%p13.7%13.7%13.7%13.7%33.3%33.3%33.3%33.3%569569569569Loans
0.7%211.7%610.5%p0.5%p0.5%p0.5%p2.2%2.2%2.2%2.2%47.9%47.9%47.9%47.9%90909090Other
12.1%3637.6%2762.7%p2.7%p2.7%p2.7%p10.3%10.3%10.3%10.3%54.8%54.8%54.8%54.8%427427427427Overseas securities
9.4%28114.3%518----1.8%p1.8%p1.8%p1.8%p12.5%12.5%12.5%12.5%----0.3%0.3%0.3%0.3%517517517517Investment funds
35.5%1,06541.7%1,510----9.1%p9.1%p9.1%p9.1%p32.6%32.6%32.6%32.6%----10.7%10.7%10.7%10.7%1,3491,3491,3491,349Domestic bonds
2.7%803.6%132----0.1%p0.1%p0.1%p0.1%p3.5%3.5%3.5%3.5%8.5%8.5%8.5%8.5%143143143143Equity-method stakes
1.4%422.7%960.7%p0.7%p0.7%p0.7%p3.4%3.4%3.4%3.4%48.1%48.1%48.1%48.1%142142142142Available-for-sale
0.0%0.30.0%0.50.0%p0.0%p0.0%p0.0%p0.0%0.0%0.0%0.0%----100.0%100.0%100.0%100.0%0000Trading
1.4%432.7%970.7%p0.7%p0.7%p0.7%p3.4%3.4%3.4%3.4%47.4%47.4%47.4%47.4%142142142142Equities
9.4%2835.5%2010.3%p0.3%p0.3%p0.3%p5.8%5.8%5.8%5.8%18.6%18.6%18.6%18.6%238238238238Cash & equivalents
MixMixMixMixMixMixMixMixMixMixMixMix
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08(Wbn)(Wbn)(Wbn)(Wbn)
Appendix: asset portfolioAppendix: asset portfolioAppendix: asset portfolioAppendix: asset portfolio
56565656
569569569569
8888
577577577577
54545454
55555555
78787878
187187187187
261261261261
129129129129
0.20.20.20.2
390390390390
FY08 FY08 FY08 FY08
79Bad debt Bad debt Bad debt Bad debt
allowanceallowanceallowanceallowance
496435TotalTotalTotalTotal
5672PFPFPFPF
SecuredSecuredSecuredSecured
CreditCreditCreditCredit
PolicyholderPolicyholderPolicyholderPolicyholder
SecuredSecuredSecuredSecured
CreditCreditCreditCredit
427
63
1
137
220
77
2
299
FY07FY07FY07FY07
Net loanNet loanNet loanNet loan
Corporate loanCorporate loanCorporate loanCorporate loan
167
264Retail loanRetail loanRetail loanRetail loan
184
(Wbn)(Wbn)(Wbn)(Wbn)
233
489
10
77
2
FY06FY06FY06FY06
2.5%2.5%2.5%2.5%
1.7%1.7%1.7%1.7%
2.0%2.0%2.0%2.0%
74.9%74.9%74.9%74.9%
8888
1.921.921.921.92
577577577577
2222
0000
9999
1111
566566566566
FY08 FY08 FY08 FY08
SubstandardSubstandardSubstandardSubstandard
CorporateCorporateCorporateCorporate
RetailRetailRetailRetail
59.2%48.3%Coverage ratioCoverage ratioCoverage ratioCoverage ratio
(Provisions(Provisions(Provisions(Provisions/substandard & below)/substandard & below)/substandard & below)/substandard & below)
0.6%3.2%
4.0%4.8%
496435TotalTotalTotalTotal
2.4%4.3%Delinquency ratioDelinquency ratioDelinquency ratioDelinquency ratio
11DoubtfulDoubtfulDoubtfulDoubtful
ProvisionsProvisionsProvisionsProvisions
Estimated lossEstimated lossEstimated lossEstimated loss
PrecautionaryPrecautionaryPrecautionaryPrecautionary
9
4.13
1
16
2
415
FY07FY07FY07FY07
NPL ratioNPL ratioNPL ratioNPL ratio
474NormalNormalNormalNormal
0
(Wbn)(Wbn)(Wbn)(Wbn)
2.44
7
11
10
FY06FY06FY06FY06
Note: Delinquency: delinquent principal more than 30 days, excluding policyholder loan
FY08 retail delinquency: includes W5bn related to Bupyoung shopping center
(mortgage loan for shop owners)
corporate delinquency: includes Hyundae R&C Construction PF loan (W0.5b)
Note: Retail credit loan: loans for employees
corporate credit: unsecured, private bond without collateral, etc
corporate secured: private bonds (Walkerhill, etc)
Appendix: loan qualityAppendix: loan qualityAppendix: loan qualityAppendix: loan quality
57575757
----
----
----
----
----40.8%40.8%40.8%40.8%
----
----
----53.753.753.753.7
5.4%5.4%5.4%5.4%
26.1%26.1%26.1%26.1%
12.2%12.2%12.2%12.2%
36.2%36.2%36.2%36.2%
14.9%14.9%14.9%14.9%
14.3%14.3%14.3%14.3%
15.1%15.1%15.1%15.1%
G/RG/RG/RG/R
----59595959
----20202020
----79797979
2222
106106106106
----186186186186
----40404040
3333
466466466466
684684684684
664664664664
1,0211,0211,0211,021
2,6312,6312,6312,631
2,8962,8962,8962,896
2,6102,6102,6102,610
(After RG)(After RG)(After RG)(After RG)
35.6%3698.7%71----52.5%52.5%52.5%52.5%34343434Net income
33.3%8254.5%30----56.0%56.0%56.0%56.0%13131313Incurred tax expenses
35.2%44128.3%101----53.5%53.5%53.5%53.5%47474747Ordinary income
-1--1----2222Non-operating income
6.5%15912.5%179----40.8%40.8%40.8%40.8%106106106106Investment income
--116--77----251251251251Underwriting income
-4.9%1216.1%1418.4%18.4%18.4%18.4%16161616Incr in catastrophe reserves
-3.8%8-22.7%6----53.753.753.753.73333Net incr in policyholders’ dividend reserves
32.6%466-5.3%4425.4%5.4%5.4%5.4%466466466466Incr in premium reserves for LT savings
18.0%46117.5%54226.1%26.1%26.1%26.1%684684684684Net operating expenses
1.4%38952.1%59112.2%12.2%12.2%12.2%664664664664Refund of LT insurance polices
18.1%67610.9%75012.0%12.0%12.0%12.0%839839839839Incurred losses
22.0%1,94317.9%2,29114.9%14.9%14.9%14.9%2,6312,6312,6312,631Net premium written
16.2%2,18016.2%2,53414.3%14.3%14.3%14.3%2,8962,8962,8962,896Gross premium written
18.2%1,89619.6%2,26715.1%15.1%15.1%15.1%2,6102,6102,6102,610Net premium earned
G/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/R(Before RG)(Before RG)(Before RG)(Before RG)
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08(Wbn)(Wbn)(Wbn)(Wbn)
Appendix: profit & loss Appendix: profit & loss Appendix: profit & loss Appendix: profit & loss
58585858
20.9%25112.6%28214.6%14.6%14.6%14.6%323323323323Solvency guidance
6.7%42755.8%665----7.5%7.5%7.5%7.5%615615615615Solvency amount
-22.7%p170.4%65.4%p235.8%----45.6%p45.6%p45.6%p45.6%p190.2%190.2%190.2%190.2%Solvency margin ratio
--0.6--79--------28282828Capital adjustment
17.4%18924.8%236----33.2%33.2%33.2%33.2%157157157157Retained earnings
2.8%29718.1%237----1.2%1.2%1.2%1.2%234234234234Capital surplus
0.0%4344.3%620.0%0.0%0.0%0.0%62626262Capital stock
12.8%26075.4%456----6.7%6.7%6.7%6.7%426426426426Total shareholders’ equity
13.5%35430.5%46116.5%16.5%16.5%16.5%537537537537Other liabilities
9.8%13310.2%146----27.5%27.5%27.5%27.5%106106106106Catastrophe reserves
22.6%3,00216.6%3,50119.9%19.9%19.9%19.9%4,1974,1974,1974,197Policy reserves
21.1%3,48817.8%4,10817.8%17.8%17.8%17.8%4,8404,8404,8404,840Total liabilities
34.6%74725.8%94119.8%19.8%19.8%19.8%1,1271,1271,1271,127Non-invested assets
17.5%3,00020.8%3,62414.2%14.2%14.2%14.2%4,1384,1384,1384,138Investment assets
20.5%3,74821.8%4,56515.4%15.4%15.4%15.4%5,2665,2665,2665,266Total assets
G/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/RG/R
FY06FY06FY06FY06FY07FY07FY07FY07FY08FY08FY08FY08(Wbn)(Wbn)(Wbn)(Wbn)
Appendix : Balance Sheet Appendix : Balance Sheet Appendix : Balance Sheet Appendix : Balance Sheet
Thank youThank youThank youThank you
Investor Relations Contacts:
Jae-Hyoung Kim (General Manager)
822-3786-1150, [email protected]
Pil-Soo Kim (Manager)
822-3786-1155, [email protected]
Ji-Yon Park (Manager)
822-3786-1156, [email protected]
http://ir.meritzfire.com