Meritz Fire & Marine Insurance reported a 5.8% drop in first-quarter net profit as losses in core insurance operations overshadowed strong investment returns.
South Korea’s insurer posted net income of 462.5 billion won ($347 million) for the January-March period, down from 491 billion won a year earlier, according to a statement Tuesday. Operating profit declined 5.9% to 621.9 billion won.
Insurance profits plunged 21.4% to 359.8 billion won as both auto and general insurance segments slipped into the red. The auto division recorded a 6.9 billion won loss compared with a 6.4 billion won profit last year, while general insurance swung to a 2.1 billion won loss from a 25 billion won gain.
Rising claim costs pushed the auto insurance loss ratio up 4.6 percentage points to 72.7%, while the general insurance loss ratio hit 93.3%.
Investment income provided a buffer, climbing 12% to 423.9 billion won. Interest-focused investments surged 29.3% to 262.1 billion won as yields recovered to 4.1%.
New contracts for long-term protection insurance declined 5.5% to 28.8 billion won. The company’s solvency ratio stood at 239%, down from 248.2% in the previous quarter but still leading the industry.
Meritz manages 42.3 trillion won in assets, predominantly in domestic and foreign bonds.
