Samsung Life Targets ₩1 Trillion+ Profit & ₩3.2 Trillion CSM in 2026

Samsung Life Insurance posted a net profit of 2.303 trillion won for 2025, a 9% increase from the 2.107 trillion won recorded in the previous year, marking a second consecutive year of exceeding 2 trillion won in net profit. The company is aiming to bolster its profitability further, targeting insurance service profit of over 1 trillion won and a new contract Contractual Service Margin (CSM) of at least 3.2 trillion won in 2026.

The positive results prompted Samsung Life to raise its full-year performance targets. Iwan Sam, Samsung Life’s Chief Financial Officer, stated the company intends to achieve insurance profit exceeding 1 trillion won in 2026, a level not seen since 2023. This will be achieved through efficient management of loss ratios and lapse rates, coupled with cost reductions based on innovation.

Samsung Life’s insurance profit experienced a significant decline in 2024, falling to 542 billion won from 1.449 trillion won in 2023, due to a contraction in CSM profits and an expansion in the gap between expected and actual results. However, the figure rebounded to 975 billion won in 2025, signaling a recovery.

Focus on Loss Ratio Management

Managing loss ratios is crucial to achieving the company’s profitability goals. Samsung Life’s loss ratio has been trending upwards over the past three years, reaching 84% at the end of 2025, compared to 78% in 2023 and 81% in 2024. The increase is largely attributed to a 4 percentage point rise in the survival benefit loss ratio, reaching 93% in recent years.

Iwan Sam explained that while the loss ratio expanded due to increased insurance payouts following the normalization of medical strikes in 2025, it stabilized in the fourth quarter, particularly within survival benefits. The company plans to refine product structures, particularly for high-loss-ratio products and enhance its underwriting systems to stabilize loss ratios.

CSM Growth and Product Strategy

Samsung Life is also prioritizing the growth of new contract CSM, anticipating challenges from regulatory changes, including fee regulations and guidelines on loss ratios and business expenses. The company aims to secure a new contract CSM of at least 3.2 trillion won in 2026, surpassing the 3.0595 trillion won achieved in 2025.

New contract CSM, introduced with the implementation of the IFRS 17 accounting standard in 2023, represents the present value of future profits expected from newly concluded insurance contracts. Samsung Life has been focusing on sales of highly profitable health insurance products, which accounted for 45% of the total insurance contract margin in the fourth quarter of 2025, exceeding the share of life insurance (death insurance).

The profitability of health insurance is estimated to be more than twice that of life insurance, driving the company’s strategic shift. Health insurance accounted for only 32% of the total insurance contract margin in the first quarter of 2025, demonstrating a significant increase in its importance throughout the year.

CSM Balance and Accounting Adjustments

As of the end of 2025, Samsung Life’s CSM balance stood at 13.2 trillion won, a modest 2% increase from the 12.9 trillion won recorded at the end of 2024. CSM is initially recorded as insurance liabilities and is gradually amortized over time, contributing to insurance profit.

The CSM was adjusted in the fourth quarter of 2025 due to actuarial assumption changes, including a 300 billion won impact from education tax increases, as well as a 600-700 billion won negative impact from reductions in premiums for first and second-generation medical insurance and increased medical claims following the normalization of the 2025 medical strike.

Capital Adequacy and Regulatory Compliance

Samsung Life is also focused on maintaining strong capital adequacy, particularly in light of new regulations requiring insurance companies with a basic capital ratio below 50% to be subject to corrective action. The company’s basic capital ratio stood at 157% at the end of 2025, significantly exceeding the regulatory requirement.

Lee Ji-sun, Head of RM Team, noted that maintaining a ratio of approximately 120-130% would be sufficient, considering the greater volatility of the basic capital ratio compared to the solvency margin ratio (킥스), and would align with a medium-to-long-term solvency margin ratio of 180%.

Samsung Life Insurance’s strategy centers on strengthening profitability through careful loss ratio management, a focus on high-margin health insurance products, and maintaining robust capital adequacy, positioning the company for continued growth in a challenging regulatory environment.