Financial Statements Without Assignations

Transcription

1 1H FY2012 November 9, 2012

2 Disclaimers The financial information contained herein has not been completely reviewed by our external auditor. Therefore, no assurance is provided that our financial statements are fully accurate, and thus our final reviewed statements may differ from the figures provided in this presentation. This presentation may include forward-looking statements that reflect prevailing conditions and the views of management as of the date hereof, all of which are subject to change. Forward-looking statements are based on a number of estimates and current assumptions which are subject to business, economic and competitive uncertainties and contingencies as well as various risks and these may change over time and in many cases are beyond the control of the Company. No assurance can be given that future events will occur, that the forward-looking statements will be achieved, or that the Company's assumptions are correct. Accordingly, actual results may differ materially from those contemplated by the forward-looking statements.

3 Contents Ⅰ Ⅱ 1H FY12 Financial Highlights New Business Results Ⅲ Investment Performance Ⅳ Efficiency Profitability Capital Adequacy - 3 -

4 1H FY12 Financial Highlights - 4 -

5 1H FY12 Financial Highlights 1H FY12 1H FY11 YoY Total Premium 1 12,054 9, % I/S Summary APE 2,177 1, % Net Profit % Total Assets 171, , % B/S Summary Invested Assets 139, , % Shareholders Equity 20,002 15, % RBC Ratio 428% 365% 63%p E V Value of New Business % 1 Excludes Corporate Pension - 5 -

6 New Business Results - 6 -

7 New Business APE SLI s strong brand attracts market demand for annuity products, boosting new business APE growth APE by Product (Monthly Average) Immediate Annuity (Monthly Average) Protection Annuity Savings 18.6% % % % 136 1H 1H FY11 FY11 1H 1H FY12 1H FY11 1H FY12-7 -

8 One-off Impacts on 1H FY12 New Business Results Revised mortality table and proposed changes to the Income Tax Act stimulates annuity sales Sales Trend for Annuity Products (APE) Sales Trend for Immediate Annuity 250 Impact from mortality table revision Proposal for amendment to Income Tax Act announced (Aug 8) FY11 avg. 1QFY12 avg. Apr May Jun Jul Aug Sep 0 FY11 avg. 1QFY12 avg. Jul '12 Aug '12 Sep '12-8 -

9 APE by Channel & Product Annuity drives new business growth across all channels; strong growth in GA and Bancassurance sales Exclusive Channel (Monthly Average) Protection Annuity Savings % GA Channel (Monthly Average) % % % % 100 1H FY11 1H FY12 Bancassurance [ Monthly Average APE ] [Single Premium Annuity 1 ] % % % 264 1H FY11 1H FY % H FY11 1H FY H FY11 1H FY12 1 Figures based on monthly average premiums not APE - 9 -

10 Protection Average Monthly APE Recovery APE Trend Recovery in protection sales since July; on track for positive growth in 2H FY12 Protection APE Trend (Monthly Average) FY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 Jul '12 Aug '12 Sep '12 3QFY12(E)4QFY12(E)

11 Risk Comparison for Protection Products Differentiated product portfolio focused on high-margin whole-life products Comparison of Protection Portfolio Comparison of Product Characteristics Health 11% 13~16 Risk Premium Sales Difficulty Health High Low Low CI Whole-life 16% 52~54 43~46 C I Mid High Mid Whole-life Low High High Lower Risk in SLI Protection Products 73% 31~33 41~44 10~13 Samsung Life Company A Company B Based on New Monthly Premium (Jan-Sep 12) Industry data based on company s estimates Minimum guarantee: 2.5% Conservative coverage amount and period - CI: 50% pre-payment, up to age 80 only - Health: sold only as re-priced riders No high-risk products sold - No dental, LTC, underwriting-free whole-life, cancer protection, etc

12 Channel Strength Diversification of recruiting pool generates expansion of exclusive channel; enhanced competitiveness of GA channel Exclusive Agents Exclusive GA Agents (Agents) YoY Growth 9,287 (Agents) 32,533 32,867 (+2,068 agents) 8,360 30, , % Univ 603 2,654 2, % GFC SA FC 2,209 1,165 1, % Sep '11 Sep '12 Non-exclusive GA (Agencies) 26,822 27,880 27,969 +4% (+1,147 agents) Sep '11 Jun '12 Sep '12 Sep '11 Sep '

13 Retirement Market Growth Rise in single premium annuity sales; continued growth in corporate pension reserves Single Premium Annuity (Monthly Average) Corporate Pension Reserves Deferred Immediate 7, ,890 Sep '11 Sep ' Corporate Pension M/S % 9.4% 8.9% 8.2% 6.7% FY10 FY11 1Q FY12 2Q FY12 SLI K S W I Source: FSS Corporate Pension Statistics (Sep 12)

14 HNW Market Growth Sustained growth in HNW market KRW 2M+ monthly premiums and KRW 100M+ single premiums HNW 부유층 Customer 고객 Growth 증가추이 Trend [ KRW 2M+ Monthly Premium ] [ KRW 100M+ Single Premium ] 고액 Large-sum 신계약 실적 Premium 추이 (월평균) Sales (Monthly Average) [KRW 2M+ Monthly Premium] [KRW 100M+ Single Premium ] (No. of customers) (KRWM million) 워 94, , ,746 23,917 27,208 33,009 워 3,878 5, B+ 300M 1B M 300M Sep '11 Jun '12 Sep '12 Sep '11 Jun '12 Sep '12 1H FY11 1H FY12 1H FY11 1H FY

15 HNW Market Growth : Protection Growth in large-sum whole-life sales from strengthened marketing and inheritance planning for HNWIs Large-sum Whole-life Sales (Average Monthly Premium) Increase in large-sum whole-life purchase by HNWIs to fund inheritance tax Coverage Amount KRW 1B+ KRW 2B+ KRW 3B+ 1,120 (KRW million) Highest inheritance tax bracket in Korea : 50% Personal assets highly concentrated in real estate - Asset breakdown of Korea s top percentile HNWIs 워 Real Estate : KRW1.66B (80%) Total : KRW 2.08B 88% (Source : Statistics Korea 2010) Increasing tax burden relative to asset size 447 1HFY11 1HFY12 Assumption: standard deduction KRW 500M + spousal deduction KRW 3B + deduction for financial assets KRW 200M

16 Value of New Business Increased annuity sales leads to a temporary drop in the share of protection sales, causing a slight decline in VoNB Value of New Business (VoNB) New Business Margin (NBM) -3.6% -5.6%p +19% -22% 29.5% - 5.4%p % -0.2%p 23.9% 워 워 1H FY11 New Business Growth Change in product mix Change in product margin 1H FY12 1H FY11 Change in product mix Change in product margin 1H FY

17 Investment Performance

18 Invested Assets & Income Adherence to ALM strategy - centering investments on interest-earning assets - generates stable investment yield despite low interest rate environment Asset Portfolio Investment Income Beneficiary Certificates 2% Real Estate 4% Cash & Equivalents 3% (KRW trillion) Rental, Dividend, & Fee Income Interest Income 3,024 2, Equities 14% Loans 140 Bonds 2,664 2,719 18% 59% Adjusted 1H FY11 1H FY12 investment 5.0% 5.2% yield 1 1 Adjusted investment yield = (Investment Income + Realized & Unrealized Capital gains Investment Expenses) / Adjusted Investment Assets (Adjusted Investment Assets exclude net valuation gains and losses on AFS securities)

19 Interest Earning Assets Stable asset management based on high quality treasury & agency bonds and policy loans Bond Portfolio Loan Portfolio (KRW trillion) (KRW trillion) Treasury & Agency Bonds (47.7%) Corporate (3.2%) 66.6 Household Credit (0.7%) Structured Bonds (1.0%) Overseas Bonds (3.7%) 9.0 Corporate Bonds (6.4%) AAA (58%) AA (36%) A (6%) Residential Mortgage 1 (4.0%) Policy (9.8%) Parentheses denote share of total investment portfolio 1 LTV for residential mortgage loans at 42%

20 Improving Reserve Composition Reduction of fixed-rate reserves and lowering of crediting rates expected to stabilize spread Reserve Composition 39% 41% 44% 45% 46% Proportion of fixed-rate reserves below 50% 6.95% 6.30% 6.08% Reserve Coverage Investment yield over Reserve 1 Average Reserve interest rate 6.59% Yield on interest earning assets 6.37% 6.27% 6.04% 5.90% 5.81% 5.77% 6.00% 5.69% 5.71% 5.51% 5.41% 5.26% FY08 FY09 FY10 FY11 1Q FY12 2Q FY12 61% 59% 56% 55% 54% [ Investment Income Excluding Bonds & Loans 2 ] FY09 FY10 FY11 1Q FY12 2Q FY12 FY12 (E) FY13 (E) FY14 (E) FY15 (E) Rental income Dividends Fee income H Floating-rate reserves Fixed-rate reserves 1H FY08 FY09 FY10 FY11 FY12(E) (Investment income + dividends + rental income + fees) / Reserves 2 Does not include capital gains

21 Efficiency Profitability Capital Adequacy

22 Expense / Loss / Persistency Rates Lower expense rate; continued stability in loss and persistency rates Expense Rate Persistency Rates 15.1% 13.4% 13th month 25th month 86.7% 87.9% 87.8% 87.0% 1H FY11 1H FY % 85.2% Loss Rate 69.6% % 68.5% 85.8% 85.9% 67.6% 66.8% 1H FY11 1H FY12 1Q FY11 2Q 3Q 4Q 1Q FY12 2Q FY12 Figures based on premiums

23 Profitability and Capital Adequacy 56.8% surge in Net Profit; rise in RBC ratio despite tightened regulation Net Profit RBC Ratio (KRW trillion) 2Q 1Q 56.8% % 428% % 365% Surplus capital Required capital (150%) Required capital (100%) 1H FY11 1H FY12 2Q FY11 1Q FY12 2Q FY

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