Financial accounting(1201) 2-_#444.pptx;_#1020

FINANCIAL ACCOUNTING
INSURANCE COMPANY

2008111347 WANG HOLIM

INTRODUCTION

CHOICE OF COMPANIES

[ CONTENTS ] ANALYSIS

CHOOSING THE BEST CO.

CONCLUSION

INTRO CHOICE ANALYSIS BEST CO. CONCLUSION

INSURANCE COMPANY ?

- Life Insurance

Pay the benefits upon the death of
the insured person

- Property Insurance

Protection against most risks to property


PROPERTY INSURANCE VS.
LIFE INSURANCE


PROPERTY INSURANCE VS.
LIFE INSURANCE

출처 : 금융감독원 (보험회사업무자료)


< TOP 3 COMPANIES >


Market share (Assets)

Samsung
65.6%
Kyobo Market
Share
Daehan

ING

Shinhan

Others

These three companies accounted for 65.6% of total market share.


THE RECENT TREND OF INSURANCE
INDUSTRY
Growth : decreased growth rate because of financial crisis
Profitability : FY08 Financial crisis → Net income ↓
Financial quality : Weak small companies’ financial quality
Competition : Big 3 companies’ market shares ↓
Small companies’ and foreign companies’
market shares are continuously↑


Established May, 1957

 The largest insurance company in Korea
 Dongbang Life insurance company in 1957
 Assets : 145 trillion won in 2011 ( 145,000,000,000,000)
 Target : private customer and institution

Insurance to
Services
pension

 Insurance  Investment – funds

 Loan  Pensions


Key accounts of
Samsung LIFE Insurance

FY2009 FY2010


Established Sep, 9, 1946

 The first insurance company in Korea
 Bankrupt in 1969, and acquired by Shindonga
 Built 63 building in 1985
 Acquired by Hanhwa group in 1997


Key accounts of
Daehan LIFE Insurance

FY2009
FY2010
41,304
Stockholders
’
Equity 61,602


Founded in 1958 / Korean Education Insurance

The first education insurance

13 different subsidiaries

Promotion of education and
formation of national capital


Key accounts of
Kyobo LIFE Insurance

Net profit margin
2007~2010 Growing flawlessly

FY2007 FY2008 FY2009 FY2010


1. Return on equity (ROE) =
ROE
Net Income / Book value of shareholders’ Equity

2. Earnings per share (EPS) =
EPS
Net income / Number of common stock shares outstanding

Net profit margin
3. Net profit margin = net income/revenues

4. Return on Invested Assets = [Investment Profit / {(Invested Asset
Return on
Investment Assets
during the term+ Invested Asset during last term - Investment Profit)/2}]

5. Debt/equity Debt/Equity Ratio
ratio = Total Liabilities/shareholders Equity

6. Required Solvency Margin Ratio =
Prepared Solvency/RequiredSolvency
Required Solvency

 Choosing “The Best Company”


Evaluation Method
1st : 3 points / 2nd : 2 points
SCORE 3rd : 1 points

We compared each of the six areas

And gave Extra Points

Extra
Points
① High level of growth
(1 point) ② High level of Required Solvency


1. Return on Equity (ROE)
FY2009 FY2010

19.31%

15.1%
12.5%

9.2% 7.7%

7.5%

(unit : Percentage, %)
Samsung

Kyobo

Daehan Kybo showed the highest


1. Return on Equity (ROE)

12.5%

67%
7.5%
Growth !
↓
Extra
Point !
FY2009 FY2010

We gave them one extra point for large amount of growth


2. Earning per share (EPS)
30,000 FY2009
FY2010

(Unit : Won)

20,000
Daehan is 3rd in EPS session.
But, how about the amount of
Growth?
10,000

5,000

Samsung Kyobo Daehan

2 1 3


2. Earning per share (EPS)

9,295

352%
Growth !
2,638
↓
Extra
Point !
FY2009 FY2010

We gave them one extra point for large amount of growth


3. Net profit margin FY2009
FY2010
3.5%
7.35% 1

4.24%
5.54% 2

2.8%
3.9% 3

210% growth in 1 year !
How they can do that?

0 2 4 6 8 (%)


3. Net profit margin

The reason is..

Principal repayments

Make
High
Performance
Profit-driven policies of the product
portfolio


4. Return on Invested Assets
FY2009 FY2010
6.38%
5.86%
5.59% 5.79% 5.83%

5.2%

There is no big difference between
1 each company.
2 3
.

(unit : Percentage, %)
Samsung

Kyobo

Daehan


5. Debt / Equity Ratio
FY2009
FY2010
1301.9%
1268.3%
1259.9%
1,200
996.6%

1,000% 851.1% 936.1%

800

600

400

200

0



851.0%

50.3%

삼성전자 FY2010

Samsung Life Insurance Liabilities 16 times higher than the
Samsung electronics.



Why these companies' debt equity
120,912,253,000,000
ratio is so high? ÷ 12,132,820,000,000
×100 = 996.6%



Insurance Company
Because of..

Many Unearned Revenue
insurance
contracts (Liabilities) Increase!

6. Required Solvency Margin Ratio


6. Required Solvency Margin Ratio
FY2009
FY2010

400 380.13%

332.79% 299.1%

300 261,71%
267.24%
224.72%

200

100

0
%


1st 2nd 3rd
(3 points) (2 points) (1 points)

ROE (%)
(+1 for high growth)
+1
EPS

Net profit Let’s check the score! +1

margin
+1
Return on
invested
assets
Cash
reserve ratio
(+1 for high level)
+1 +1


16 Points

The score is..
10 Points

Got the highest score !
9Points


Is the best insurance company !

Reference
Dart System http://dart.fss.or.kr/
통계청 http://www.index.go.kr/egams/stts/jsp/potal/st
생명보험협회 http://www.klia.or.kr/

삼성생명 http://www.samsunglife.com/
삼성생명 관련 기사
http://www.etoday.co.kr/news/section/newsview.php?TM=news&SM=0202&idxno=377271
http://www.asiae.co.kr/news/view.htm?idxno=2010111515090164284
교보생명 http://kyobo.co.kr/
대한생명 http://www.korealife.com/
대한생명 관련 기사
http://www.newspim.com/view.jsp?newsId=20101110000124
http://www.sisaseoul.com/news/articleView.html?idxno=26231
ING생명 http://www.inglife.co.kr/
ING생명 관련 기사
http://www.fnnews.com/view?ra=Sent0701m_View&corp=fnnews&arcid=101117145959&cDateYear=2010&cDate
Month=11&cDateDay=17
신한생명 http://shinhanlife.co.kr/

Financial accounting(1201) 2-_#444.pptx;_#1020

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Financial accounting(1201) 2-_#444.pptx;_#1020