FY2012 상반기 v2 수정8(eng) [호환 모드] - Meritzir.meritzfire.com/ir/upload/MeritzF&M_FY20121Hresults.pdf · 2014-02-08 · Share Price Performance 5 PMit IdIfPtSO KMeritz,

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MeritzMeritz F&MF&MMeritzMeritz F&MF&MFY2012. 1H Financial ResultsFY2012. 1H Financial Results

N 2012N 2012Nov 2012Nov 2012

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1DisclaimerDisclaimer

This material has been prepared based on internally audited 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.p

This presentation includes forward-looking statements This presentation includes forward looking statements regarding the company’s outlook for Sept 2012 and beyond, including projected premium and net income. These forecasts are 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. g yWe have no obligation or responsibility regarding investment made based on such forward-looking statements.

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2Contents

OverviewOverview1

2012 12012 1

OverviewOverview1

FY2012. 1H Financial ResultsFY2012. 1H Financial Results2

FY2012. 2H Business PlanFY2012. 2H Business Plan3

※ AppendixAppendix

-- FY2012. 1H Financial ResultsFY2012. 1H Financial Results

-- Regulatory issuesRegulatory issues : Indemnity insurance, RBC, Auto rates: Indemnity insurance, RBC, Auto rates

FY2011 E b dd d V lFY2011 E b dd d V l-- FY2011 Embedded ValueFY2011 Embedded Value

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3History

2012.07 Total Invested Assets exceeded W7trn

2012.05 Total Assets exceeded W9trn

2011.03 Founding of Meritz Financial Holding

2010.08 Acquisition of Meritz Business Service (MBS) as subsidiary

Second rebirth (2005~ )

2010.04 Founding of ‘Meritz Securities’ (Merger of Meritz Securities and Meritz Investment Bank)

2009.12 Founding of Ritz Partners (Sales Subsidiary)

2008.07 Founding of Meritz Asset Management

2008.04 Founding of Meritz Financial Information Service

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 Rechristened Meritz Fire & Marine Insurance, Head office relocated to new building in Gangnam

Era of Growth(1983~2004)

1996.05 Total assets exceed W1trn

1983 12 H d ffi l t d t Y id

, g g

2005.03 Disaffiliates from Hanjin Group

(1983 2004)

Rebirth

1983.12 Head office relocated to Yeouido

1976.12 Sales exceed W10b, a first among Korean insurers

1967.07 Hanjin Group acquires Oriental Fire & Marine InsuranceRebirth (1950~1982) 1956.07 IPO on KSE, becoming Korea’s first listed insurer

1950.05 Rechristened Oriental Fire & Marine Insurance

Era of foundation & exploration(1922~1949)

1922.10 Founding of Chosun Fire & Marine Insurance

(Korea’s first non-life insurance company)

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4Shareholders Structure

Major shareholder’s stake : 50.19% Meritz Finance holdings 50.01% (48,357,743 shares)

Free-float : 46.1%→ Foreign investors : 12.48%, domestic : 33.64%→ Major institutional investors :

NPS 9 01% KB Asset management 6 37%NPS 9.01%, KB Asset management 6.37%,Allianz global investors 4.41%

Spin-off

Affiliates

Jung-ho Cho

Shareholders (2012.9.30)

Meritz Financial holdingsSp o

(2011.3.25)

MeritzFinanceHoldings

MeritzF&M

74.4%

Domestic investors33.64%

40.0% 100% 100% 100% 100%50.01%50.19%

12 48%

MeritzSecurities

RitzPartners

MeritzFinancialService

MeritzAsset

Management

MeritzBusinessService

MeritzF&M

Affiliates

Foreign investors

ESOP

2.19%

1.50%12.48%

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55Share Price Performance

M it I d t KOSPI P f (08 03 31 12 9 30)Meritz, Industry, KOSPI Performances(08.03.31~12.9.30)

Meritz140.4%

Top4

100.0%

KOSPI117.1%

131.3%

Industry91.0%

(KRW, X) 08.03.31 09.03.31 2010.3.31 2011.3.31 2012.3.31 2012.9.30

2012/09/282011-03-312009-09-292008-04-01

(Adj) EPS 684 -800 1,244 1,516 1,702 1,690

(Adj) PER 13.2 - 5.9 8.3 7.6 7.5

(Adj) BPS 4,864 4,293 6,457 8,552 9,297 10,664(Adj) BPS 4,864 4,293 6,457 8,552 9,297 10,664

(Adj) PBR 1.9 0.9 1.1 1.5 1.4 1.2

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6Dividends

[Di id d Hi ] The first insurance company to pay an interim dividend (Sep 2007)

Dividend Net income Dividend ratio Payout ratio

FY06 W100 W 35 8 bn 1 4% 22 2%

[Dividend History] The first insurance company to pay an interim dividend (Sep 2007)

FY06 W100 W 35.8 bn 1.4% 22.2%

FY07

Interim W 100 (11.8 bn) W 56.9 bn 1.1% 20.7%

Year-end W 125 (14.2 bn) W 71.1 bn 1.4% 20.0%

Total W 225 (26.0 bn) W 71.1 bn 2.5% 36.6%

FY08

Interim W 50 (5.3 bn) W 42.3 bn 0.6% 12.6%

Year end - W -58 8 bn - -FY08 Year-end - W -58.8 bn - -

Total W 50 (5.3 bn) W -58.8 bn 0.6% -

FY09 W300(32.0 bn) W 140.4 bn 4.0% 22.8%

FY10 W450(39.3 bn) W 120.9 bn 4.5% 32.5%

FY11 W550(53.2bn) W164.6bn 4.1% 32.3%

Samsung Hyundai Dongbu LIG

Payout ratio 22.3% 27.2% 19.3% 19.9%

[FY11 Industry Dividend]

Payout ratio 3% 27.2% 19.3% 19.9%

Dividend yield 1.7% 4.0% 2.5% 3.0%

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7ContentsContents

OverviewOverview1 OverviewOverview1

FY2011. 1H Financial ResultsFY2011. 1H Financial Results2






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8Overview : Meaningful FY2012Meaningful FY2012 / Major performance of FY2012. 1H/ Major performance of FY2012. 1H

Meaningful FY2012Meaningful FY2012 : 90: 90thth AnniversaryAnniversary FY2012.1H Major performanceFY2012.1H Major performance

A challenging year to construct A challenging year to construct

sustainable growth base sustainable growth base andand taketake

a a Giant leap Giant leap withwith

U/WU/W

CompetitivenessCompetitiveness

a a Giant leap Giant leap withwith

extensive implementation extensive implementation of of

9090thth i b i i b i

Rapid growth of Protection health insurance

9090thth anniversary business anniversary business under the under the

profitableprofitable centered managementcentered management

Growing stance for Auto and Commercial insuranceExpansion of superior sales groupHitti g th k f Sh h ld lprofitableprofitable--centered managementcentered management Hitting the peak of Shareholder values

→ → Great performance in both profitability and growthGreat performance in both profitability and growth

→→ Prepare the cornerstone to expand the scale of sustainable Prepare the cornerstone to expand the scale of sustainable

profit in the first Half of 90profit in the first Half of 90th th yearyear

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9Overview (profit) : 23.3% CAGR23.3% CAGR

140.4120.9

164.6Net profit

996 41.0% -13.9%36.2%

71.182.5Net profit

G/R

40.1%

-58.8

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

■ FY2008 Unusual factors:•RG loss : -181.7 bn / bad investments write-off : -60.2 bn

Additi l DAC ti ti 30 2b

(Unit: KRW Bn) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

Direct premium 2,534.0 2,896.4 3,288.0 3,836.1 4,254.3 2,358.7

U/W Profit -77.2 -186.4 -16.4 -95.8 -47.8 -49.4

•Additional DAC amortization : -30.2bn

/

Combined Ratio 102.8% 108.7% 100.1% 102.4% 101.2% 102.2%

Net investment profit 179.2 106.2 207.6 257.0 268.6 163.1

Investment Yield 5.6% 2.8% 4.9% 5.3% 4.6% 4.7%

Net Profit 71.1 -58.8 140.4 120.9 164.6 82.5

Adj Net Profit 84.7 -99.1 154.0 132.3 164.6 82.5

Adj ROE 18.6% -16.1% 26.2% 18.7% 20.8% 17.8%

Solvency Ratio 230 9% 162 9% 176 1% 187 0%Solvency Ratio(RBC Ratio)

235.8% 189.9%230.9%

(269.7%)162.9%

(198.9%)176.1%

-187.0%

-

Note) RBC ratio : RBC ratio as of Aug 2012 was 199.6%. In Sep, RBC ratio dropped due to RBC regulation change

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1010Overview (sales) : Overview (sales) : Growth focused on LongGrowth focused on Long--term Insuranceterm Insurance

76% of DPW is Long76% of DPW is Long--term insurance (69% for Top 4)term insurance (69% for Top 4)(Unit: KRW Bn)

(6%)

267.7

299 7

4,254.3

3,836.1Commercial

Auto

Long-term

(10%)

(8%)

(20%)

(19%)

796.4

776.2

299.7

321.9

320 0 2 359 3

3,288.0

28,964

2,534.0

Long term

(12%)

(11%)

(25%)

(21%)

(18%)

(6%)

(21%)

(10%)

412.6

691.8

726.7

685.5

145.0

320.0

295.82,359.3

(27%)

(64%)(69%)

(70%)(75%)

Sales(mix)

(76%) (69%)1,801.7

3,190.22,760.2

2,274.41,849.6

1,552.8(61%)

(64%)1,552.8

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 1H T 4

Note) FY2012.1H : Preliminary figures

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H Top 4

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1111LongLong--term sales : term sales : HealthHealth M/S increaseM/S increase → → Increase in earning powerIncrease in earning power

LongLong--term Health M/S : FY2011 12.4% (rank 5term Health M/S : FY2011 12.4% (rank 5thth) → ) → FY2012.1H 14.3% (rank 4FY2012.1H 14.3% (rank 4thth))

Protection mix exceeded 75%. More than 30%p higher than Top 4Protection mix exceeded 75%. More than 30%p higher than Top 4

14.3%

Protection M/S and G/R Protection P/F Trend

12.4%

14.3%LT Protection

LT Health

86% 86%

81%

Meritz

Top 4

10.9%10.5%

11.1%11.6% 11.6%

10.9%10.7%10.8%

10.2%

10.7%

81%

72%

69%

75%74% 75%

63%

70%

63%

54%

47% 47%FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

LT Protection G/R

(monthly avg.)

16%

(4.0bn)

20%

(4.9bn)

10%

(5.3bn)

-15%

(4.5bn)

5%

(4.8bn)

21.7%

(5.4bn)

LT Health G/R

(monthly avg.)

15%

(3.6bn)

26%

(4.6bn)

8%

(4.9bn)

-20%

(3.9bn)

3%

(4.0bn)FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

42.8%

(5.2bn)

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1212LongLong--term sales : term sales : Dramatic sales of 90Dramatic sales of 90thth year productyear product ‘M‘M--Basket’Basket’

「「ProductProduct + Advertising/PR+ Advertising/PR + Sales Etc+ Sales Etc」」SuccessfulSuccessful Integrated marketing strategyIntegrated marketing strategy

Sept 2012 (monthly)Sept 2012 (monthly) : W5.2bn new record of new product : W5.2bn new record of new product → → W7.1bn protection healthW7.1bn protection health (increase in superior coverage)(increase in superior coverage)

90th Momentum M-Basket Performance

1 year preparationi d t ’ fi t d th b t

Quantitative Quantitative aspectaspect

Qualitative Qualitative aspectaspect

Future Future valuesvalues

industry’s first and the bestPhysical service

HealthHealthIncrease Increase

In superior In superior coveragecoverage

pp

w7.1bnw7.1bn

New ProductNew ProductW5.2bnW5.2bn

coveragecoverage

+ Auto

Secure 7,000 sales pplTV-CF, anniversary events

Beyond the level of OurBeyond the level of Our8888thth year product and year product and

competitors’ founding competitors’ founding

KRW 20 KRW 20 mnmnincreaser in Superior increaser in Superior coverage(Death)coverage(Death)

2nd2nd Marketing Marketing base base for Savings/Annuityfor Savings/Annuityand Auto insuranceand Auto insurance, ppTV CF, anniversary events

media PR

Strengthen sales capacitycompetitors founding competitors founding anniversary productanniversary product

and Auto insuranceand Auto insurance

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13Long-term Profit: Superior LT L/R & C/R than Top 4

Long-term L/R Long-term C/RLong-term L/R Long-term C/R

83.2%

85.2%

86.4%

84.4%

103.4%

102.3%

82.4% 82.2%

83.2%

82.5%101.2%

101.3%

99.6%

101.2%

101.8%

101.3%

101.5%

78.8%

77.5%

80.1% 80.4%79.5%

99.0%

99.8%

98.6%

(K-GAAP 79.6%)

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

Meritz Top 4

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

Meritz Top 4

Note) K-IFRS since FY2011. As of Aug 2012 for Top 4 Note) K-IFRS since FY2011. As of Aug 2012 for Top 4

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14

Coverage Premium Mix Risk L/R by coverage (ExcI IBNR)

Living benefit Guaranteed Living benefit Non-Guaranteed

Death Property

Living benefit GuaranteedLiving benefit Non-GuaranteedDeathProperty

( IBNR )

22 3% 22 0% 20.9%

18.7% 17.8% 17.5% 17.8% 16.9%

19.8%

15.6%

109.8% 108.7%103.8% 104.0%

108.7%108.2%

PropertyTotal

26.6%24.5% 22.3% 22.0% 20.9%

101.0%

83.2% 81 2%

106.1% 95.6%90.5%

94.0%

78.8%

22.1% 27.8% 33.5% 35.9% 38.8% 41.7%

51.2% 52.4%56.5% 55.3%

49.7%47.1%

73.6%76.2%

79.1% 81.2% 79.9%

32.6% 29.9% 26.7% 24.3% 23.4% 22.8% 40.8%

33.6% 34.4%39.3% 39.5%

42.8%

FY2007 FY2008 FY2009 FY2010 FY2011 Aug-12 FY2007 FY2008 FY2009 FY2010 FY2011 Aug-12

Note) K-IFRS since FY2011

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15Auto Sales : Online M/S upturn

DPW

(606)(577)

(664)

(571)

(647) (688)

776 8 796 4( ) avg monthly prem

(Unit: KRW Bn)

28.9 33.8 40.957.2 90.4

726.7692.2685.5

776.8 796.4

412.6On line

656.6 692.9 651.4 719.6 706.0

348.2

64.4On-line

Off-line

M / S7 3% 7 4% 7 2%7 7%7 3% 7 3%

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

6.6%6.2% 6.1%

7.3% 7.4% 7.2%

6.4% 6.3% 6.4%

7.7%7.3% 7.3%

Total

1.7% 1.8% 1.8%2.3%

2.8%3.7%

Off-line

On-line

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

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16Auto P/L : C/R improved with decline in L/R

A t C/R

33 4% 34 6% 32 8% 36.5% 23.0% 24 8%

104.5%107.6% 108.4% 116.8% 106.9% 105.4%

Auto C/R

74.2% 69.9% 75.5% 80.3% 76.3%

33.4% 34.6% 32.8%

72.8%

24.8%

(* 7.6%)

83.9%

(* 7.8%)

80.6%

FY2007 FY2008 FY2009 FY2010 FY2011 41122Aug-12Note) K-IFRS figure since FY2011 / * claim survey fee

141.4%

On-line Off-line

36.1%51.3%

24.5% 29.1%34.2%

111.6%120.4% 115.3% 113.0%

32.7%36.5% 22.8% 24.3%34.6%

104.1% 107.7%116.1%

106.0% 104.3%

77.4% 84.3% 90.0% 83.1% 76.1%

(* 7.8%)

75.0% 79.6% 72.3%69.5% 75.6%

(* 7.6%)

83.9%80.1%

(* 7.7%)

90.8%

(* 7.9%)

83.2%

) FY2010 2011.2FY2008 FY2009 FY2010 FY2011 Aug-12 FY2008 FY2009 FY2010 FY2011 Aug-12

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17Commercial : Transition to Growth oriented → Establish profit base

DPW L/R

FY2011 Remodeling completion FY2011 Remodeling completion → → FY2012 transition to growth orientedFY2012 transition to growth oriented

Meritz

DPW L/R

12.2%8.0% 6.9%

12.0%5.7%

13.5%Meritz G/R Industry G/R

69.7% 70.6%

Industry8.2%

0.6%-10.7%

8.0%

-6.9%

12.6%

65.5%66.8%

59.8%61.0%

59.3% 64.8%

58 8%

295.8320.0 321.9

299.7267.7

54.7% 55.6% 55.6%

58.8%

145.0

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1HFY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

Note1) Meritz does not participate in cell phone, foreigners’ accident and overseas insuranceNote 2) Preliminary figures

Note1) FY2008 & FY2009 commercial L/R : Excluding RGNote2) K-IFRS figure since FY2011 / Industry figures as of Aug 2012

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18U/W : C/R 102.2%, Industry’s lowest L/R

102 8%

108.7%

102 4% 102 2%101.3%

[combined Ratio]Meritz 102.8%

100.1%102.4% 101.2% 102.2%

102.3% 100.9% 100.8%100.9%100.7%Top 4 Avg

Meritz

78.9%75.4%

79.3% 79.9%80.4%82.5%

78.5% 76 7%

78.6%

83.8%83.4%80.8%[Loss Ratio]

T 4 A

Meritz78.5% 76.7%

26.2%

Top 4 Avg

[Expense Ratio]23.9% 24.7%

23.1% 22.4%

20.8%22.2%24.2%

22.7%21.5%

[Expense Ratio]

Top 4 Avg

Meritz

17.6% 17.2%

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

Note) K-IFRS figure from FY2011

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19Investment Asset Portfolio : Focused on FixedFixed--income assetincome asset

Assets W9.4trn, Invested Assets W7.4trn, 76% FixedAssets W9.4trn, Invested Assets W7.4trn, 76% Fixed--income assetsincome assets

(Unit: KRW Bn)2011.3 2012.3 2012.9

Mix Mix Mix G/R Profits Yield

Fixed-income Fixed-income asset 3,888.5 72.4% 5,034.3 75.8% 5,587.0 75.5% 11.0% 150.8 5.8%

Performance-based asset 305.9 5.7% 283.7 4.3% 365.5 4.9% 28.8% 8.3 5.2%

Stock-type asset 413.8 7.7% 547.7 8.2% 624.5 8.4% 14.0% 9.6 3.3%

Other 39.2 0.7% 18.9 0.3% 30.5 0.4% 61.4% -3.6 -27.2%

Freely invested Assets 4,647.5 86.6% 5,884.6 88.6% 6,607.5 89.2% 12.3% 165.2 5.4%

Equity-method

& real estate720.0 13.4% 757.6 11.4% 797.2 10.8% 5.2% -2.0 -0.5%

Total investment asset 5,367.5 100% 6,642.2 100% 7,404.7 100% 11.5% 163.1 4.7%

Total Asset 6,973.9 - 8,505.7 - 9,742.4 - 14.5% - -

Note) Fixed income = deposit, AFS bond, overseas bond, loan / performance based = trading bond, alternative investment /Stock = outsourced investment, trading stock, stock-type AI / Other = Non-operating deposit, Property management fees

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20

Profit marginN t t i tf li b h lChannel Mix

Channel

29.1% 28.1% 25.9% 24.0% 18.9% 17.8% FC

New biz

8.5%

In-force biz

10.5%

New contract premium portfolio by channelChannel Mix

Employed

sales

Exclusive for commercial line corporate clients

78

23 6% 34 1%

31.6% 29.6%

17.0% 19.2% 18.9% 18.8%15.1% 15.2%

TC

GA 7.4%

8.0%

9.1%

10.7%Exclusive Channel FC

Financial consultant 4,406

78

30.3%21.7% 20.3% 23.1%

34.4% 37.4%

23.6%31.0% 34.9% 34.1%

Others 5.3% 7.8%TC

Total consultant 4,031

FY2007 FY2008 FY2009 FY2010 FY2011 FY12.1H

) New biz profit margin : FY2011 EV

Total 7.3% 9.5%Others

Traditional sales force2,537

13 8%(431)

(432)

Sales force qualification exam market share

Commonchannel

Bancassurance16 banks

7,419 branches

1 313 i 13.8%11.2%

9.0% 9.5% 9.3%10.6%

(432)(335) (327) (372)

(467)(monthly avg)

Qualification

rate

GA(independent

general agency)

channel1,313 agenciesAbout 84,000

employees

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012.1H

Multi-channel,

New-channel

Home-shopping, cross-selling,

on-line direct, etc.

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2121Channel: Recruiting and an expansion of active personnel

New recruitmentNew recruitment : FY2012 1H Monthly : FY2012 1H Monthly AvgAvg of people qualifiedof people qualified 467 (G/R +39%), M/S 10.8% (FY2011 9.3%)467 (G/R +39%), M/S 10.8% (FY2011 9.3%)

Active personnel : Over achievement with Active personnel : Over achievement with 7,290 (102.9%*) a7,290 (102.9%*) active personnel and 2,968ctive personnel and 2,968 (100.2%*)(100.2%*) elite personnelelite personnel

Qualified M/S

Sales Target Quarterly Target

+724

7,300(11.0%)

4 800FY2012

11.1% 11.7% 12.2%

10 8%

10.7%

TargetAchivement

+6553,300

(16.8%)

4,800(15.8%)

FY2012(G/R)

Active Sales

7,290

10.0%10.8%

Target Excessive achievement

6,950 7,080 7,150 7,300

+148+210

4,145

6,576

2,825

+475

FY2011

7,0987,290

1Q 2Q 3Q 4Q

Active EliteQualified

Note) Active Personnel (*) : Achievement rate

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2222FY2012. 1H Summary : Sales

(Unit: KRW Bn)

FY2011 FY2012 Plan FY2012.1H

G/R M/S G/R M/SAchievement-rate

G/R M/S

Initial Prem(monthly equivalent) 82.1 9.5% 7.7% 89.6 9.2% 7.1% 43.7 48.8% 15.6% 7.9%

Protection 56.9 4.8% 10.8% 65.1 14.5% 12.9% 32.6 50.1% 21.7% 11.6%

Long-term

(Health) 48.3 2.6% 12.4% 56.0 15.8% 15.0% 31.1 55.5% 42.8% 14.3%

Savings 25.2 21.8% 4.7% 24.5 -2.8% 3.2% 11.2 45.7% 0.8% 4.1%

Initial Prem 96.8 16.8% 6.8% 104.0 7.4% 7.2% 55.2 53.1% 35.9% 6.2%

Continuous Prem 3,031.8 16.6% 8.9% 3,458.1 14.1% 8.9% 1,679.3 48.6% 14.7% 8.8%

Sub total 3,128.7 16.6% 8.8% 3,561.9 13.8% 8.9% 1,734.4 48.7% 15.3% 8.7%

Auto

Off-line 706.0 -1.8% 7.2% 726.6 2.9% 7.7% 348.2 47.9% -5.2% 7.3%

On-line 90.4 43.5% 2.8% 131.5 45.5% 3.4% 64.4 49.0% 40.0% 3.7%

Sub total 796.4 2.6% 6.1% 858.2 7.8% 6.5% 412.6 48.1% -0.2% 6.4%

Commercial 267.7 -10.7% 5.5% 289.2 8.0% 5.6% 145.0 50.1% 12.5% 5.2%

One-time payment 61.6 -19.5% 2.4% 60.0 -2.5% 7.0% 67.3 112.2% 278.8% 5.5%

Total 4,254.3 10.9% 7.6% 4,769.3 12.1% 8.0% 2,359.3 49.5% 14.3% 7.7%

Note) Initial premium (monthly equivalent) : Excluding one-time payment

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2323FY2012. 1H Summary : Summarized PL

(Unit: KRW Bn)FY2011 FY2012 Plan FY2012.1H

(K-IFRS / K-GAAP) (K-IFRS / K-GAAP) (K-IFRS / K-GAAP) YoY

Long-term 80.1% 79.3% 80.1% 79.1% 80.4% 79.6% 0.7% 0.7%

(Risk) 87.1% 83.4% 84.8% 81.0% 85.2% 81.6% -1.3% -1.4%

Loss rate Auto 83.9% 76.4% 82.9% 75.0% 81.1% 72.9% -2.2% -3.4%

Commercial 64.8% 58.2% 63.7% 56.7% 55.6% 47.7% -2.6% -3.7%

Sub total 80.4% 78.1% 80.1% 77.8% 79.9% 77.6% 0.1% 0.1%

Expense rate 20.8% 23.1% 21.4% 23.7% 22.4% 24.6% 2.1% 2.2%

Combined rate 101.2% 101.2% 101.5% 101.5% 102.2% 102.2% 2.2% 2.3%

Investment

Investment profit

268.6 328.3 163.1 34.0%

(Investment (Investment yield)

4.6% 4.6% 4.7% +0.4%p

Net profit 164.6 195.0 82.5 -9.9%

ROE 23.2% 19.9% 21.5% -4.4%p

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24ContentsContents

OverviewOverview1 OverviewOverview1

FY2012 1H Fi i l R ltFY2012 1H Fi i l R lt2 FY2012. 1H Financial ResultsFY2012. 1H Financial Results2






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2525FY2012 New ChallengeFY2012 New Challenge

Great leap in 90Great leap in 90thth Anniversary !Anniversary !Meritz F&M New turning point !!Meritz F&M New turning point !!Great leap in 90Great leap in 90thth Anniversary !Anniversary !Meritz F&M New turning point !!Meritz F&M New turning point !!

Net profit W195bn, LT health M/S 15%Net profit W195bn, LT health M/S 15%

Secure Industry’s 1~2Secure Industry’s 1~2ndnd rank level of ROE/Profit rank level of ROE/Profit MarginMarginMarginMargin

Maintain existing strategy for Maintain existing strategy for current marketcurrent market

3 New growth Momentum3 New growth Momentum Regional differentiation growth strategy

Maintain LT health high margin-focused strategy

Expansion of auto Insurance 90th anniversary projects performed

extensively Maintain commercial insurance remodeling,

Competitive markets-centered growth

Stabilized investment strategy

Future business investment

extensively

Dramatically increase sales strength

Secure the highest level of software

competitiveness Future business investmentcompetitiveness

FY2012 Market condition Key word : FY2012 Market condition Key word : 『『Slow GrowthSlow Growth』』++『『UncertaintyUncertainty』』→ ‘→ ‘Risk at all timesRisk at all times’’ Management SystemManagement System

: : Enhance vital business competitiveness through risk management, Enhance vital business competitiveness through risk management,

and focus on and focus on discovering middiscovering mid--long term growth factorslong term growth factors

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FY2012. 2H Business Plan 26

■ C l ti f fit bl th d ■ Completion of profitable growth under

the growing trend of 1H.2012

■ Long-term protection health insurance jump-up in market position,,

Enhance Auto competitiveness

(C ti t t gth (C ti t t gth li b i )li b i )(Continue to strengthen on(Continue to strengthen on--line business)line business)

■ Enhance internal stability and austerity under the

emergency business management system

- Ensure internal stability of centered region ,,

P l i k t P l i k t i t d ffi ii t d ffi iPropel risk management Propel risk management ––oriented efficiencyoriented efficiency

■ Efforts to achieve its profit objectives

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FY2012. 2H Business Plan 27

0501

Profit Profit Utmost effortsUtmost efforts0501

Health Health insuranceinsurance

AchievementAchievement

Leading level Target

M-Basket Enhance income managementExpense reduction

04JUMPJUMP

FruitfulFruitful

→ A solid 2nd Tier

Future profits KRW 300 bn Continuous Continuous innovative innovative FruitfulFruitful

RigidficationRigidfication

E d

efficiencyefficiency

Stabilized region

Efficient management

0302 Expand

On-line channel Austerity Austerity

management!management!Improve Improve

Auto lineAuto lineEmergency Emergency

business business management management

M/S 6.6% challengePrepare base to improve combined ratio

Strengthen emergency business management system

gg

More through operation ofrisk management system

risk management system

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2828ContentsContents

AppendixAppendix※



-- FY2011 Embedded ValueFY2011 Embedded Value

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2929

FY2012 1H FY2011 FY2010 FY2009

Appendix : Sales

(KRW Bn)FY2012.1H FY2011 FY2010 FY2009

Mix G/R Mix G/R G/R G/R

Commercial 145.0 6.2% 12.5% 267.7 6.3% -10.7% 299.7 -6.9% 299.7 0.6%

Auto 412.6 17.5% -0.2% 796.4 18.7% 2.6% 776.2 12.2% 776.2 -4.8%

Long-term 1,734.5 73.5% 15.3% 3,128.7 73.5% 16.6% 2,683.7 19.2% 2,683.7 22.1%

New 55.2 2.3% 35.9% 96.8 2.3% 16.8% 82.9 -6.7% 82.9 17.7%

Recurring 1,679.3 71.2% 14.7% 3,031.8 71.3% 16.6% 2,600.8 20.2% 2,600.8 22.3%

One-time pymt 67.3 2.8% 278.8% 61.6 1.4% -19.5% 76.5 242.9% 76.5 298.2%

Total 2,359.3 100% 14.3% 4,254.3 100% 10.9% 3,836.1 16.7% 3,836.1 13.5%

M / SFY2012.1H FY2011 FY2010 FY2009

G/R G/R G/R G/R/

Commercial 5.2% -0.1%p 5.5% -1.3%p 6.9% -0.9%p 7.8% -0.6%p

Auto 6.4% 0.0%p 6.1% -0.2%p 6.3% 0.1%p 6.2% -0.4%p

Long term 8 7% 0 2%p 8 8% 0 2%p 9 0% 0 1%p 9 1% 0 2%pLong-term 8.7% -0.2%p 8.8% -0.2%p 9.0% -0.1%p 9.1% -0.2%p

New 6.2% -0.3%p 6.8% -1.1%p 7.8% -1.3%p 9.1% -0.4%p

Recurring 8.8% -0.2%p 8.9% -0.2%p 9.1% 0.0%p 9.1% -0.1%p

One-time pymt 5.5% 1.5%p 2.4% -7.2%p 9.6% 1.3%p 8.3% 4.8%p

Total 7.7% -0.2%p 7.6% -0.5%p 8.1% 0.0%p 8.1% -0.2%p

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3030Appendix : Loss Ratio

(KRW Bn)FY2012.1H FY2011 FY2010 FY2009

G/R G/R G/R G/R

Losses 33 4 -9 7% 77 0 -22 3% 88 4 74 7% 50 6 -81 1%

Com-mercial

Losses 33.4 9.7% 77.0 22.3% 88.4 74.7% 50.6 81.1%

Earned prem 60.1 -5.6% 119.0 -6.3% 127.0 -3.1% 131.1 -7.0%

Loss ratio( w/o RG) 55.6% -2.6%p 64.8% -13.3% 69.7% 10.4%p

59.3%(38.6%)

-1.8%p(151.3%p)( / ) ( ) ( p)

Auto

Losses 304.0 -5.7% 645.1 8.7% 545.7 5.1% 519.0 10.4%

Earned prem 374.7 -3.2% 768.5 13.1% 679.5 -1.1% 687.2 2.1%

Loss ratio 81 1% 2 2%p 83 9% 3 4%p 80 3% 4 8%p 75 5% 5 6%pLoss ratio 81.1% -2.2%p 83.9% -3.4%p 80.3% 4.8%p 75.5% 5.6%p

Long-term

Losses 1,432.8 19.6% 2,524.2 15.6% 2,161.6 25.2% 1,727.2 22.1%

Earned prem 1,781.7 18.6% 3,149.8 15.8% 2,719.8 22.1% 2,228.1 24.1%

Loss ratio 80.4% 0.7%p 80.1% -0.2%p 79.5% 2.0%p 77.5% -1.3%p

LT risk L/R (w/ IBNR) 85.2% -1.3%p 87.1% 1.1%p 86.0% 1.8%p 84.2% 3.6%p

LT risk L/R (w/o IBNR) 81.6% -1.4%p 83.9% - 83.2% 5.7%p 77.5% 2.2%p/ ( / ) p p p

Total

Losses 1,770.2 13.7% 4,037.3 12.8% 2,795.7 21.7% 2,296.8 6.7%

Earned prem 2,216.5 13.5% 3,686.8 14.5% 3,526.3 15.8% 3,046.4 16.7%

Loss ratio 79.9% 0.1%p 80.4% -1.2%p 79.3% 3.9%p 75.4% -7.1%p

Note1) Commercial L/R in ( ) includes RG losses, Note2) K-IFRS figure from FY2011

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3131

FY2012 1H FY2011 FY2010 FY2009

Appendix : Expense Ratio

(KRW Bn)FY2012.1H FY2011 FY2010 FY2009

G/R G/R G/R G/R

Expenses 514.0 24.5% 875.5 2.1% 857.9 7.3% 799.9 8.6%

Wages & Wages & benefits 74.5 1.2% 162.6 -8.7% 178.0 7.7% 165.3 6.5%

Administrative 123.8 20.7% 210.6 10.4% 190.8 25.0% 152.7 6.4%

Sales-related 313.9 33.4% 499.5 10.7% 451.0 -0.1% 451.3 9.7%

Other expenses 1.8 45.8% 2.9 -92.5% 38.1 24.5% 30.6 15.0%

Expenses recovered 18.3 4.7% 36.8 -14.0% 42.8 -9.9% 47.5 -10.7%

Net expenses 495.7 25.4% 838.7 2.9% 815.1 8.3% 752.4 10.1%

Gross premium earned 2,216.5 13.4% 4,037.3 14.5% 3,526.3 15.8% 3,046.4 16.7%

Expense Ratio 22.4% 2.2%p 23.1% -%p 23.1% -1.6%p 24.7% -1.5%p

Admin Expense Ratio 8.7% -%p 11.8% 0.8%p 11.0% -0.1%p 11.1% -0.8%p

Sales Expense Sales Expense Ratio 13.7% 2.2%p 11.3% -0.8%p 12.1% -1.5%p 13.6% -0.7%p

Combined rato 102.2% 2.2%p 101.2% -1.2%p 102.4% 2.3%p 100.1% -8.6%p

Note1) K IFRS figure from FY2011 Note1) K-IFRS figure from FY2011

Note2) Sales-related expenses: acquisition cost/collection fees, commissions paid to agencies, acquisition cost, amortization, deferred acquisition cost, etc

Note3) Other expenses: loss adjustment expenses, co-insurance paid, reinsurance commission paid, etc

Note4) Expenses recovered: claim service fee recovered, R/I commission received, etc

Note5) Sales expenses: collection fees and agencies commissions/ Admin cost: Labor cost excluding sales cost, maintenance cost

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323232Appendix : Long-term product portfolio

(KRW Bn) FY2012.1H Mix FY2011 mix FY2010 mix FY2009 mix

Protection-type 1,397.2 77.6% 2,544.0 79.3% 2,227.3 80.7% 1,922.1 84.5%

Accident 1,059.7 58.8% 1,846.3 57.5% 1,545.6 56.0% 1,270.0 55.8%Accident 1,059.7 58.8% 1,846.3 57.5% 1,545.6 56.0% 1,270.0 55.8%

Drivers 167.0 9.3% 343.8 10.7% 345.3 12.5% 316.1 13.9%

Property 100.7 5.6% 208.5 6.5% 175.1 6.3% 157.6 6.9%

Disease 50.2 2.8% 108.4 3.4% 121.0 4.4% 136.5 6.0%

Bundle 19.6 1.1% 39.7 1.2% 40.3 1.5% 41.9 1.8%

Personal annuities 52.0 2.8% 95.8 3.0% 86.2 3.1% 77.5 3.4%

Savings 352.5 19.6% 568.9 17.7% 446.7 16.2% 274.5 12.1%

Total 1,801.7 100.0% 3,208.7 100.0% 2,760.2 100.0% 2,274.1 100.0%

Risk+loading premiums 799.0 44.3% 1,435.1 45.3% 1,188.7 17.5% 10,12.0 44.5%

S i i 1 002 7 55 7% 1 773 6 54 7% 1 531 0 21 3% 12 62 1 55 5%Savings premiums 1,002.7 55.7% 1,773.6 54.7% 1,531.0 21.3% 12,62.1 55.5%

13th month persistency 78.2% -1.4%p 79.6% +0.4%p 79.2% -0.4%p 79.6% 6.0%p

25th month persistency 62.3% -1.8%p 64.1% -5.8%p 69.9% 12.4%p 57.5% -5.3%pp y 6 3 8 p p p p

Note) Including one-time payment. Persistency: 6 month average

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333333Appendix : Long-term product portfolio

Category

FY2012.1H FY2010 FY2009 FY2008

L/R Mix L/R Mix L/R Mix L/R Mix

Death coverage 42.4% 19.8% 39.6% 20.9% 38.0% 22.0% 34.6% 22.4%

Living benefits 98.4% 64.7% 103.8% 62.2% 105.6% 60.4% 102.2% 60.1%

Medical treatment 108.8% 38.2% 114.1% 36.3% 113.0% 35.5% 108.7% 35.4%

Daily allowance 91.6% 12.0% 99.5% 12.3% 111.3% 12.3% 101.1% 12.8%

Disease 84.8% 9.9% 90.2% 9.2% 88.4% 8.4% 90.4% 8.0%

Other 58.4% 4.6% 59.1% 4.4% 60.3% 4.1% 70.6% 3.9%

Property/other 45.6% 15.5% 49.7% 16.9% 55.1% 17.7% 56.5% 17.6%

Total 79.1% 100.0% 81.2% 100.0% 81.8% 100.0% 79.1% 100.0%

Note1) Loss Ratio: As of Gross Premiums Written, excluding IBNRNote1) Loss Ratio: As of Gross Premiums Written, excluding IBNR

Note2) Death coverage: death/disablement (total disablement, disease death) / Medical treatment: accident treatment, disease treatment

Daily allowance: accident daily allowance, disease daily allowance / Disease: cancer, other diseases, CI

Other: other accident (fracture/burn, etc), other disease (food poisoning, etc), Property/Other: Driver expenses, liabilities, property loss, fire

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343434Appendix : Long-term Funding Cost & ALM

Long-term FY2012.1H FY2011 FY2010 FY2009

Funding Cost 4.14% 4.18% 4.19% 4.34%

Fixed 4 13% 4 17% 5 19% 5 36%Fixed 4.13% 4.17% 5.19% 5.36%

Variable 4.15% 4.19% 4.06% 4.16%

Fixed mix 32.3% 32.1% 11.4% 15.3%

V i bl i 67 7% 67 9% 88 6% 84 7%Variable mix 67.7% 67.9% 88.6% 84.7%

Investment yield 5.4% 5.6% 5.6% 5.8%

Spread 1.3%p 1.4%p 1.4%p 1.5%p

ALM FY2012.1H FY2011 FY2010 FY2009

Asset Duration 4.03 3.88 4.21 3.92Asset Duration 4.03 3.88 4.21 3.92

Bond Duration 5.74 5.43 6.30 5.60

Liability Duration 4.99 4.61 5.04 4.90y

Matching ratio 80.9% 84.2% 83.5% 80.0%

Note1) Subject : LT & Pension account / Funding cost: Monthly basis / Investment yield is YTM / Bond duration : Domestic and foreign bonds

Note 2) Funding cost : Calculation method change from product basis to coverage basis after FY2011

Note 3) RBC Duration : FY2009 Asset 4.34, Liability 4.08 FY2011 Asset 4.02, Liability 3.35

FY2010 Asset 4.73, Liability 4.16 FY2012.1H Asset 4.18, Liability 4.10

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353535Appendix : Loan Quality

(KRW Bn)FY2012.

1H FY2011 FY2010 FY2009

Normal 13,51.0 1,231.2 943.3 784.2

(KRW Bn)FY2012.

1H FY2011 FY2010 FY2009

Retail loan 650.9 686.9 571.7 503.8

Credit 0 0 0 0 0 Precautionary 0.9 0.3 0.5 11.2

Substandard 4.8 11.6 15.0 3.4

Doubtful 0 8.5 13 2 3 8

Credit 0 0.0 0 0

Secured 285.6 337.2 273.2 228.6

Policyholder 365.3 349.7 298.5 275.1

Corporate loan 727 5 571 3 403 5 300 8 8.5 13.2 3.8

Estimated loss 21.7 6.6 3.2 2.0

Total 1,378.4 1,258.2 975.2 804.6

Corporate loan 727.5 571.3 403.5 300.8

Credit 147.7 97.8 78.2 47.5

Secured 119.1 133.2 132.7 44.6

SOC related 197 4 142 5 65 7 50 8NPL ratio 1.92% 2.12% 3.22% 1.14%

Provisions 33.8 26.0 19.7 13.3

provisions/

SOC related 197.4 142.5 65.7 50.8

PF 263.3 197.8 126.9 157.9

Total 1,378.4 1,258.2 975.2 804.6

Di t p /

substandard & below)

(Coverage ratio)

127.2% 97.2% 62.6% 144.6%

Delinquency Ratio 1.19% 0.74% 1.45% 2.45%

Discounts difference in Present value

-11 -1.2 0 0

Bad debt Allowance

-267 -21.0 -19.7 -13.3

Retail 0.90% 0.79% 0.98% 1.02%

Corporate 1.45% 0.68% 2.12% 4.67%

Additional deferred loan

income9 1.4 -1.2 -1.1

Net Total Loan 13,516 1,237.4 954.3 790.2Net Total Loan 13,516 1,237.4 954.3 790.2Note1) NPL ratio = Substandard & below /TotalNote2) Based on K-IFRSNote3) Coverage ratio = Total Provision / substandard & belowNote4) FSB Standard (including retirement accounts, 30 days Overdue principal and

interest, Delinquency on Policyholder loan)

※ K-IFRS figure from FY2011 Note1) Corporate Credit : Including Unsecured private placement bondsNote2) Corporate secured : Including mortgage bond, RP, CP

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363636

Loan

Appendix : PF loan(Unit: KRW Bn)

Debtor Site/Project Constructor Loan amount Maturity NPL Remark

Saenal, Co. Gimpo apartmentShindongah, NamKwang,

Chonggu10.8 ’14-12-31

Estimated loss,

fixed81.8% is reserved in bad debt allowance

Jeju Investment & Estimated Jeju Investment & Development, Co. Jeju ICC Anchor resort&hotel Kumho Industrial 3.1 ‘10-03-25

Estimated loss

100% is reserved in bad debt allowance

N-mode House, Co.Wonhyo-ro Complex(Office & apartment)

Dongah Construction 8.1 ‘14-04-09 NormalAs of Sept 57.0% in process (Planned process 63.3%) / 93.7% Contracted

C-First, Ltd Chong-na Complex(Office & apartment) PF ABL POSCO Engineering 20.0 ‘13-06-15 Normal

As of Sept 87.6% in process (Planned process 84 8%) / 95 8% C t t d

, (Office & apartment) PF ABL g g 20.0 13 06 15 Normal84.8%) / 95.8% Contracted

Song-do Global Complex Development, Co. Song-do A3 block apartment Lotte Engineering &

Construction 7.0 ‘13-11-30 Normal As of Sept 69.6% in process (Planned process 69.6%) / 83.9% contracted

S.L D&C, LtdChun-ho Dong Complex

(Office & apartment)Samsung C&T

Corporation 32.2 ‘16-06-24 Normal Permit in progress

White Korea, LtdKangseo Kayang GS Xi mixed-use

developmentGS Cons 26.2 ’14-03-28 Normal

As of Sept 53.0% in process (Planned process 52.4%) / 67.0% contracted

Chun-ahn doojung landmark project

Chunan Doojung-dong e-convenient world

Dae lim industry 6.5 ‘13-12-06 NormalAs of Sept 56.7% in process (Planned process 56.4%) / 100.0% contracted

Chung nam yeongi gun e As of Sept 67 5% in process (Planned process JS Saejong

Chung-nam yeongi-gun e-convenient world

Dae lim industry 9.2 ‘13-11-30 NormalAs of Sept 67.5% in process (Planned process 68.0%) / 100.0% contracted

Digiprism Co., LtdUiwang Poil Information Technology

CenterSamsung Heavy

Indurstries20.4 ‘14-09-26 Normal

As of Sept 12.9% in process (Planned process 12.6%) / 7.3% contracted

Carcass the 1st Co LtdChunan sungsung-dong urban

Daewoo E&C 30 0 ‘13 10 28 Normal Permit in progressCarcass the 1st Co., Ltdg g g

developmentDaewoo E&C 30.0 ‘13-10-28 Normal Permit in progress

Central Jangkyo., Ltd Jangkyo 4 block hotel development Dae lim industry 46.9 ’14-03-18 Normal -

SC.,LtdYong in Dongbaek

healthcare town businessGS Cons 40.0 ’13-08-17 Normal

Construction and sales to be scheduled on the first half of ’13healthcare town business first half of 13

Minrak 2 block housing developement lease

Minrak 2 block development business

Daewoo E&C 3.9 ’16-09-28 NormalConstruction and sales to be schduled on the aug ‘13

total 263.3

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3737Appendix : Investment Assets Portfolio

(KRW Bn)

FY2012.1H FY2011 FY2010 FY2009

G/R Mix Mix Mix Mix

466 8 16 3% 6 3% 0 3% 401 5 6 0% 6 4% 222 2 4 8%Cash & equivalents 466.8 16.3% 6.3% 0.3%p 401.5 6.0% 343.7 6.4% 222.2 4.8%

Equities 196.7 17.1% 2.7% 0.1%p 167.9 2.5% 196.9 3.7% 126.3 2.7%

Trading 0 - - %p 0 - 45.6 0.9% 0 0.0%

Available-for-sale

196.7 44.8% 2.7% 0.1%p 167.9 2.4% 151.3 2.8% 126.3 2.7%

Equity-method stakes

2.8 - 0.0% - 2.8 0.0% 2.8 0.1% 190.2 4.1%stakes

Domestic bonds 2,907.5 12.7% 39.3% 0.4%p 2,579.2 38.8% 1,887.9 35.2% 1,597.6 34.5%

Investment funds 895.7 21.9% 12.1% 1.0%p 734.9 11.1% 651.2 12.1% 525.4 11.4%

Overseas securities 653.2 7.0% 8.8% -0.4%p 610.4 9.2% 499.7 9.3% 446.1 9.6%

Other 136.0 -11.3% 1.8% -0.5%p 153.3 2.3% 113.8 2.1% 62.1 1.3%

L 1 351 6 9 2% 18 3% 0 4% 1 237 4 18 6% 954 3 17 8% 790 2 17 1%Loans 1,351.6 9.2% 18.3% -0.4%p 1,237.4 18.6% 954.3 17.8% 790.2 17.1%

Real estate 794.4 5.2% 10.7% -0.6%p 754.8 11.4% 717.2 13.4% 667.3 14.4%

Investment assets 7,404.7 11.5% 100.0% - 6,642.2 100% 5,367.5 100.0% 4,627.6 100.0%, ,

Investment yield 4.7% - - 0.4%p 4.6% - 5.3% - 4.9% -


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FY2012 1H FY2011 FY2010 FY2009

Appendix : P & L

(KRW Bn)FY2012.1H FY2011

G/R G/R G/R G/R

Net premium earned 2,216.5 13.5% 4,037.3 14.5% 3,526.3 15.8% 3,046.4 16.7%

Gross premium written 2,358.7 14.2% 4,254.3 10.9% 3,836.1 16.7% 3,288.0 13.5%

Net premium written 2,236.0 14.7% 4,019.5 12.0% 3,590.4 18.9% 3,020.9 14.8%

Incurred losses 710.2 5.2% 1,380.3 10.3% 2,795.7 18.2% 993.2 -2.7%, ,

Refund of LT insurance polices 397.4 12.9% 732.7 8.2% 673.7 2.6% 656.8 -1.0%

Net operating expenses 495.7 25.4% 838.7 14.2% 815.1 8.3% 752.4 10.1%

I r i r i r rIncr in premium reservesfor LT savings

660.4 25.4% 1,129.0 20.1% 940.3 47.2% 638.9 37.2%

Net incr in policyholders’ dividend reserves

2.3 -38.6% 4.4 -44.5% 7.4 -6.0% 7.9 182.1%

Incr in catastrophe reserves - - - - 11.3 -17.0% 13.6 -

Underwriting income -49.4 - -47.8 - -95.8 - -16.4 -

Investment income 163.1 34.0% 268.6 15.2% 257.0 23.8% 207.6 95.5%

Non-operating income -5.0 - -3.2 - -4.9 - -4.0 -

Ordinary income 108.7 -9.5% 217.5 52.1% 156.3 -16.5% 187.2 -

Incurred tax expenses 26.2 -8.0% 52.9 55.5% 35.4 -24.3% 46.8 -

Net income 82.5 -9.9% 164.6 51.1% 120.9 -13.9% 140.4 -


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FY2012 1H FY2011 FY2010 FY2009

Appendix : B/S

(KRW Bn)FY2012.1H FY2011 FY2010 FY2009

G/R G/R G/R G/R

Total assets 9,742.4 12.6% 8,654.5 20.9% 6,973.9 15.6% 6,035.0 14.6%

Investment assets 7,404.7 11.5% 6,642.2 23.9% 5,367.5 16.0% 4,627.6 11.8%

Non-invested assets 2,337.7 16.2% 2,012.3 11.7% 1,606.4 14.1% 1,407.4 24.9%

Total liabilities 8,701.6 12.2% 7,755.5 19.7% 6,358.3 18.7% 5,355.0 10.6%

Policy reserves 7,841.4 10.4% 7,101.3 19.6% 5,702.1 21.4% 4,697.0 11.9%

Cat reserves 860.2 31.5% 142.8 9.2% 130.8 9.5% 119.4 12.9%

Other liabilities 1,040.8 15.8% 654.2 20.5% 525.4 -2.5% 538.9 0.2%

Total shareholders’ equity

48.4 0% 899.0 31.7% 615.6 -9.5% 680.0 59.8%

Capital stock 261.3 0% 48.4 10.8% 43.6 -29.5% 61.9 0.0%

Capital surplus 296.5 10.6% 261.3 53.6% 170.4 -27.7% 235.8 0.6%

Retained earnings 149.6 4.7% 268.0 -33.0% 386.8 29.9% 297.8 89.2%earnings 149.6 4.7% 268.0 33.0% 386.8 29.9%

Capital adjustment 6.0 16.8% 5.2 - -250.9 - -116.6 -

Solvency margin ratio - - - - 162.9% -68.0%p 230.9% 41.0%p

RBC Ratio 187.0% %p 176.1% -22.8%p 198.9% -70.8%p 269.7% -


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4040Reference (1) : Expected regulation changes – Indemnity products

FSC background

Expand consumers choice and provide economical ‘StandExpand consumers choice and provide economical ‘Stand--alone indemnity products’alone indemnity products’

Provide transparent claim payment with uninsured medical cost screening deviceProvide transparent claim payment with uninsured medical cost screening device Provide transparent claim payment with uninsured medical cost screening deviceProvide transparent claim payment with uninsured medical cost screening device

Regulation changes

Classification To About when

Reformation of product

1) Provide needed products from customers’ perspective

2) Reflect flexible public insurance policy, and medical

1) Introduce stand-alone indemnity products : Allow current rider method

‘13.1Q

2) P i i i l 3 1 ‘13 1Qproduct structure

environment changes3) Prevent any disadvantages when customers

transfers the product

2) Premium repricing cycle : 3 years → 1 year ‘13.1Q

3) Coverage period adjustment: liberal → 15 years ‘13.1Q

1) Uninsured medical cost screening device : Take advantage of HIRA (Health Insurance Review & Assessment) and provide In ‘13

Reinforcement of screening

claim settlement

1) Claim payment/improve screening system, prevent excess clinic and billing

2) Choose customers’ reasonable premium/coverage

( ) pmanagement system

2) Claim form Standardization: Code formatting, code, and form

In ’13

3) Deductible choices : Launch 20% deductible products ‘13.1Q

Others -

Reinforce premium disclosure / An introduction of standard pricing/ Check customers’ will to maintain duplicate registrations for similar products

‘13.1Q

Council for private medical insurance / Sharing claim payment i f i

In ‘13information

In 13

Check for duplicate group indemnity products Dec ‘12

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4141Reference (2) : Expected regulation changes – Risk Based Capital

Timeline Category Regulation change RBC ratio

Insurance risk-Price risk of long-term line calculation change

b d b i k-6.6%p

RBC regulation change

Sep 2012

Insurance risk: by product → by risk coverage

6.6%p

-9.3%pCredit risk- Raise risk coefficient of mortgage loan : 1.4% → 2.8%, - Raise coefficient of retail loan : 3.0% → 4.0%- Add risk of membership assets (golf, resort) (12%)

-1.1%p

Exclude capital adjustment (source of stock option) 1 2%pSolvency margin

- Exclude capital adjustment (source of stock option) -1.2%p

- Exclude over and short capital of subsidiaries (Hanjin Korindo) -0.6%p

Not confirmed

Insurance risk - Raise risk coefficient of commercial /auto insurance (Confidence level : 95% → 99%) -10.9%p

- Add risk of negative interest spread : Max {(exposure of insurance liabilities × reserve I d k i ) 50% 0 }(expected

before Dec 2013)-14.2%p

Interest riskrate –Invested assets × market interest rate)×50%, 0 }

- Apply 99% of confidence interval (raise coefficient of interest fluctuation and risk coefficient of minimum required capital)

→ about 23% increase

-3.9%p

Credit risk - Raise risk coefficient of credit risk (Confidence level : 95% → 99%) -23.5%p

CY2014.1Q -29.0%pSolvency margin

- Exclude deferred tax liabilities related to catastrophe reserve -5.5%p

RBC ratio management Enhance solvency margin through profit increaseEnhance solvency margin through profit increase

Category Sep 2012 Mar 2013(E) Chg.

Solvency margin W1002.9bn W1,098.9bn W96.0bn

Solvency (RBC) W536.2bn W565.4bn W29.2bn

Minimize RBC (Risk Based Capital)Minimize RBC (Risk Based Capital)

-- Asset (Credit & Market) risk : Mainly invest in risk free assets andAsset (Credit & Market) risk : Mainly invest in risk free assets and

minimize investing in high risk assetsminimize investing in high risk assets

Insurance risk : Strength managing LT risk L/RInsurance risk : Strength managing LT risk L/RRBC ratio 187.0% 194.4% +7.4%p -- Insurance risk : Strength managing LT risk L/R, Insurance risk : Strength managing LT risk L/R,

expand nonexpand non--guaranteed coverageguaranteed coverage

-- Interest risk : Strength managing LT applied rateInterest risk : Strength managing LT applied rate

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42Reference (3) : History of Auto premium change

FY2006

2006.04 Avg. 3.6% increase


2006.11 Avg. 1.6% increase (2.5% increase in net premium for personals)

2007.01 Improve premium discount/surcharge regulation (Extend the period to reach minimum applied rate (40%) 7yrs → 8yrs)

FY2007

2007.04 2.5% increase for on-line premium (On-line loading premium increase)


2007 09 Adj t t t f t ffi g l ti i l t (Di t 0 7% 0 31%)

p p / g g ( p pp ( ) y y )

2007.02 Avg. 7.0% increase (9.6% for personals, 3.0% for business use)

FY2007 2007.09 Adjust auto rate for traffic regulations violators (Discount : 0.7% → 0.31%)


2008.04 Implement differentiation strategy : Select superior classes (Ex. new cars less than 3yrs) and secure competitiveness

2008.09 Avg. 1.5% cut (2.0% for personals)FY2008

2009.10 Introduce new premium rate for cars with black box, 2.5% increase for personals


2009.01 Avg. 1.0% cut

FY2008

FY20092009.10 Introduce new premium rate for cars with black box, 2.5% increase for personals

2010.01 Diversify auto premium surcharge standard (W0.5mn → max W2mn)

2010.10 2.8% increase of property coverage due to rise in repair wagesFY2010

2011.06 Adjust auto rate for traffic regulations violators (Discount rate : 0.7% → 0.5%)

2012.01 Improve discount/surcharge regulation (Minimum applied2234rate 40% → 30%, period 12yrs → 18yrs)

2011.02 Change co-payment system (fixed amount → fixed rate), expand maximum discount rate (40% → 30%) and etc.FY2010

FY2011

FY2012

2012.02 Adjust auto rate for traffic regulations violators (Discount rate : 0.5% → 0.6%)

2012.04 Avg. 2.4% rate cut for personals

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43FY2011 Embedded Value results

▶▶ FY2011 EmbeddedFY2011 Embedded Value : 2,154.0bnValue : 2,154.0bn (increased by 473.0 (increased by 473.0 bnbn (28.1%) compared to (28.1%) compared to FY2010 (KFY2010 (K--IFRS))IFRS))

Unit : KRW Bn

473.028.1% ↑2,154.02,154.0

1 599 11 599 1Embedded

Value

131.08.2% ↑1,730.11,730.1

274 9

1,681.01,681.0-49.1

2.8% ↓

1,599.11,599.1

753.7753.7Value of

Value

1,041.71,041.7

1,316.61,316.6

288.038.2% ↑

274.926.4% ↑

1,041.71,041.7Value of

in-force business

Adjusted 157 0 198.1

↑

-49.17 1% ↓

AdjustedNet Worth 688.4688.4

-157.018.6% ↓

845.4845.4 837.4837.4198.1

31.0% ↑639.3639.3

7.1% ↓

FY2010(K-GAAP)

FY2009 FY2011FY2010(K-IFRS)

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44Value of in-force business (VIB) - Assumptions

Operational AssumptionOperational Assumption Economic AssumptionEconomic Assumption

Persistency Ratio

- Experience analysis on 3-years data

: Analysis for product type and channelInvestment yield : 4.85%

(Unit : %) FY2011 FY2010 YoY

Loss Ratio

- Analyze past 6-year data

: Analysis per 17 benefit categories

- PV of In-force Biz L/RRisk Discount Rate : 11 0% ( 11 5%)

(Unit : %) FY2011 FY2010 YoY

Yield 4.85 5.00 - 0.15%p

: FY2010 89.4% , FY2011 86.8%

- Commission

: Applied Meritz’s payment schedule

Risk Discount Rate : 11.0% ( 11.5%)

Inflation Rate : 3.0%

Expense Cost

pp p y

- Expense cost excluding Commission

: Experience study on one-year experience

data

Tax : 24.2%

Crediting Rates

- Applied for traditional /ISP

: Rates of ISP are applied per types

(Saving ISP , Protection ISP , etc.)

Required Capital

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45Value of in-force business (VIB)

VIB = Present Value of Future Profit VIB = Present Value of Future Profit –– Cost of Capital = 1,316.6bnCost of Capital = 1,316.6bn

Unit : KRW Bn

Item FY2011 FY2010 YoY

PV of Future Premium (a) 13,851.1 10,936.2 2,914.9 26.7%

PV of Future Profit (b) 1,542.9 1,198.0 344.9 28.8%

Cost of Capital (c) 226.3 156.3 70.0 44.8%

(c/a) 1.6% 1.4% +0.2%p

Value of In-force Business 1 316 6 1 041 7 274 9 26 4%(d = b - c) 1,316.6 1,041.7 274.9 26.4%

Value Margin (d/a) 9.5% 9.5% +0.0%p

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46Value of new business (VNB)

▶▶ ValueValue of 1of 1--year new business : 274.4 year new business : 274.4 bnbn

Unit : KRW Bn

Category FY2011 FY2010 YoY

PV of Future Premium (a) 3,776.5 3,209.6 566.9 17.7%

Annualized Premiums equivalent (b) 1,151.8 1,059.0 92.8 8.8%

PV of Future Profit (c) 319.4 267.7 51.7 19.3%

Margin (c/a) 8.5% 8.3% +0.2%p

Cost of Capital 45.0 33.8 11.2 33.1%

Value of 1-year New Business (d) 274.4 233.9 40.5 17.3%

P fit M gi (d/ ) 7 3% 7 3% 0 0%Profit Margin (d/a) 7.3% 7.3% 0.0%p

Profit Margin on ANP (d/b) 23.8% 22.1% + 1.7%p

※ ANP : Annualized premiums equivalent

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47P/EV

Stock price, EVPS, P/EVStock price, EVPS, P/EV

/P/EV

0 54x0 57x

0.65x

W19,825

W22,2750.54x0.57x

W7,350

W12,917 W12,900 W12,100

FY2009 FY2010

Stockprice

EVPS

Current(2012 8 17)

Stockprice

EVPSStockprice

EVPS

(2012.8.17)

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48FY2012 Forecast - VIB

▶▶ VIB forecastVIB forecast : 1,608.8bn, increase by 22.2% compared to FY2011: 1,608.8bn, increase by 22.2% compared to FY2011

CategoryPV of Future

Premium

Risk margin Other margin VIB

R ti R ti R ti

Unit : KRW Bn

Premium Ratio Ratio Ratio

Protection

FY2011Saving

Annuity

TotalTotal

Protection

FY2012Saving

Annuity

TotalTotal

※ Other margin = Savings margin + Expense margin – Dividend– Tax - CoC

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49FY2012 Forecast - VNB

▶▶ VNB ForecastVNB Forecast : 325.0bn, increase 18.4% compared to FY2011: 325.0bn, increase 18.4% compared to FY2011

Category

NB Initial Premium

PVFP Risk margin Other margin VNB

Unit : KRW Bn

Ratio Multiple Ratio Ratio PM

Protection

Saving

Annuity

Total

Protection

Saving

Annuity

Total

※PVFP : PV of Future Premium

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Thank you!!Thank you!!

Investor Relations Contacts:

82-2-3786-1156, 1157

http://ir.meritzfire.com

경영지원팀 / 정소영 / 2012-11-01 18:44:26

FY2012 상반기 v2 수정8(eng) [호환 모드] - Meritzir.meritzfire.com/ir/upload/MeritzF&M_FY20121Hresults.pdf · 2014-02-08 · Share Price Performance 5 PMit IdIfPtSO KMeritz,

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