View
6
Download
0
Category
Preview:
Citation preview
0
Meritz F&MMeritz F&M3Q. FY2010 Financial Results3Q. FY2010 Financial Results
1DisclaimerDisclaimer
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.
This presentation includes forward-looking statements regarding the company’s outlook for FY2010 and beyond, including projected premium and net income. These forecasts are subject tounknown risks and uncertainties that may cause actual figures todiffer from those stated or implied by such statements. We have no obligation or responsibility regarding investment made based on such forward-looking statements.
2Contents
2
3
-- 3Q.FY2010 Financial Results3Q.FY2010 Financial Results-- FY2009 Embedded ValueFY2009 Embedded Value
1 About Meritz F&MAbout Meritz F&M
3Q.FY2010 Review3Q.FY2010 Review
Meritz Financial Group TransitionMeritz Financial Group Transition
AppendixAppendix
33History
Era of Growth(1983~2004)
Second rebirth (2005~ )
Rebirth (1950~1982)
Era of foundation & exploration(1922~1949)
1996.05 Total assets exceed W1t
1983.12 Head office relocated to Yeoido
2010.12 Total assets exceeded W7t
2010.08 Total Invested Assets exceeded W5t
2010.08 Acquisition of Meritz Business Service (MBS) as subsidiary
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
2007.08 Share offering (W225.7b)
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 Kangnam
2005.03 Disaffiliates from Hanjin Group
1976.12 Sales exceed W10b, a first among Korean insurers
1967.07 Hanjin Group acquires Oriental Fire & Marine Insurance
1956.07 IPO on KSE, becoming Korea’s first listed insurer
1950.05 Rechristened Oriental Fire & Marine Insurance
1922.10 Founding of Chosun Fire & Marine Insurance
(Korea’s first non-life insurance company)
4
Major Shareholder’s stake: 21.6%
Jung-ho Cho : 21.4% (26,500,725 shares) etc
Shareholders Structure
Free-float : 59.8 % → Foreign investors : 12.0%, domestic : 47.8%→ Major shareholders:
:KB Asset management 9.2%, NPS 9.1%
21.6%
3.0%
2.6%
13.0%12.0%
47.8%
AffiliatesShareholders (2010.12.31)
Meritz Securities
Ritz Partners
Meritz Financial
Service
Meritz Asset
Management
30.71% 100% 100% 100%
MeritzBusinessService
100%
• Major shareholders
• ESOP
• Related companies
• Treasury
• Foreigners
• Domestic
5Share Price Performance
Meritz, Industry, KOSPI Performances (10.01.01~ 10.12.31)
1.85
4,864
13.17
684
08.03.31
1.66
4,575
12.65
601
07.03.31
1.12
7,757
8.07
1,079
2011.12.31
1.100.90Adj PBR
6,4574,293Adj BPS
5.90-Adj PER
-800
09.03.31
1,244Adj EPS
2010.3.31(Unit: won, x)
100.0%
KOSPI124.6%
Meritz139.6%
Top 4 123.4%
12/30 3/4 5/7 7/10 9/12 11/15 1/18
MeritzKOSPIIndustryTop 4 avg
Industry100.7%
66Dividends
Dividend Net income Dividend ratio Payout ratio
FY05 W 100 W 26.4 bn 2.4% 29.6%
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 - -
Total W 50 (5.3 bn) W -58.8 bn 0.6% -
FY09
Interim - W 71.5 bn - -
Year-end W 300 (32.0 bn) W 140.4 bn 4.0% 22.8%
Total W 300 (32.0 bn) W 140.4 bn 4.0% 22.8%
Samsung Hyundai Dongbu LIG
Payout ratio 24.9% 30.5% 19.8% 21.1%
Dividend yield 1.6% 3.7% 2.3% 2.7%
[Dividend History] The first insurance company to pay an interim dividend (Sep 2007)
[FY09 Industry Dividend]
Note: Implemented 10:1 stock split in Feb 2006
77Our Management
- CEO since June 2005
- Chief Operations Officer at PCA Life
- Chief Information Officer at Samsung Fire & Marine
- 26 yrs of experience at US P&C insurers (General Accident, Harleysville Insurance Group)
Vice Chairman & CEO: Myung Soo Michael Wohn
Chairman: Jung Ho Cho
CFO: Jin Kyu Song
- Chairman of Meritz Insurance since 2003
- Chairman & CEO of Meritz Securities (2003)
- Vice Chairman & CEO of Hanjin Securities (1999)
- Swiss International Institute for Management Development (MBA)
- CFO of Meritz Insurance since May 2005, head of strategic planning division
- Current member of Korean Actuarial Association
- More than 20 years in the non-life insurance industry
- Actuary and risk management manager of Samsung Fire & Marine (2005)
8Contents
1
2
3
1 About Meritz F&MAbout Meritz F&M
3Q.FY2010 Financial Results3Q.FY2010 Financial Results
Meritz Financial Group TransitionMeritz Financial Group Transition
AppendixAppendix
-- 3Q.FY2010 Financial Results3Q.FY2010 Financial Results-- FY2009 Embedded ValueFY2009 Embedded Value
9
260.6%(292.3%)
16.1%
100.2
91.2
5.1%
189.5
102.4%
-70.7
2,867.3
3Q. FY2010
4.9%2.8%5.6%5.9%6.4%Investment Yield
140.4-58.871.135.826.4Net Profit
154.0-99.184.747.538.7Adj Net Profit
26.2%-16.1%18.6%13.7%12.0%Adj ROE
230.9%(269.7%)
189.9%235.8%170.4%193.2%Solvency Ratio
(RBC Ratio)
207.6106.2179.2159.2149.5Net investment profit
100.1%108.7%102.8%105.4%106.3%Combined Ratio
-16.4-186.4-77.2-116.0-114.1U/W Profit
2,180.2
FY2006
3,288.02,896.42,534.01,876.9Direct premium
FY2009FY2008FY2007FY2005(Unit: KRW Bn)
Overview (Industry leader in average annual profit G/R)
[Net Profit]91.2 bn
140.4 bn
71.1 bn
35.8 bn26.4 bn
-58.8 bn
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
w/out Unusual factors
99.6 bn
FY2008 Unusual factors:•RG loss : -181.7 bn / bad investments write-off : -60.2 bn / additional DAC amortization : -30.2bn
Net Profit
G/R 35.6%
98.6%
40.1%
41.0%
10
Direct Prem Mix
49.6% 56.6% 61.3% 63.9% 69.2%
34.0%30.8% 27.0% 25.1% 21.0%
71.2%
20.4%12.6%16.4% 11.7% 11.0% 9.8% 8.4%
FY2005 FY2006 FY2007 FY2008 FY2009
55.4% 57.0% 62.9% 64.2%
33.8% 32.4% 31.7% 29.3% 26.7% 25.2%
12.8% 12.2% 11.3% 11.9% 10.4% 10.6%
58.8%53.4%
F Y 2 0 0 5 F Y 2 0 0 6 F Y 2 0 0 7 F Y 2 0 0 8 F Y 2 0 0 9 3 Q . F Y 1 0
FY 2 00 4
Meritz Top 4
CommAuto
L T
65.2%
80.7% 83.6% 85.8% 83.3%76.7%
47.2%
78.1%72.0% 70.2% 70.4%
60.0%
Meritz
Top 4
LT New Premium Protection mix
LT New Premium Protection M/S
10.2%9.1%
11.4% 10.6% 10.7% 10.5%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
Meritz
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
Maintain ProtectionMaintain Protection--type driven salestype driven sales
LT New Premium & Sales Portfolio (#1 leader in LT mix & Protection-type Mix )
Note1) LT Protection New Premium M/S and Mix : Excludes 1 time payment
11Issue: Issue: Recent LongRecent Long--term Protectionterm Protection--type new premium growthtype new premium growth
Note1) FY2009, 1H.FY2010 is monthly average, Oct~Dec is based on each month
5,532
4,1464,449
4,846
5,263
FY2009 1H.FY2010 2010.10 2010.11 2010.12
Premium
Protection-type New Premium
Meritz’ recovery of protection-type new premium as of September 2010 and
will turnover to growth in FY2011
76.7%
61.1%
67.4%
74.7% 78.1%
Protection Mix
(KRW Mn)
8.9% 8.6%
0.8%
-38.9%
5.5%
G/R 10.8%
12.1%
10.7%10.2%10.7%
M/S
12Underwriting Profit (#1 in L/R and #2 in C/R)
106.3% 105.4%102.8%
108.7%
100.1%102.4%
81.9%78.9%
82.5%79.7%
100.9%
101.3% 103.0%
100.7%103.8%103.3%
75.4%
81.1%
81.7%
81.5%
78.5%
81.4%78.6%
76.7%
14.4%13.0%
11.9% 11.2% 10.7%
24.4% 24.3% 23.9%
26.2%
22.6%
12.4%12.7% 12.1% 12.0%
11.9% 11.9%
10.7%
24.7%
21.6% 22.3% 22.2%
24.2%22.7%
21.6%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q. FY2010
Top 4 Avg
Meritz
Top 4 Avg
Meritz
Top 4 Avg
Meritz
Top 4 Avg
Meritz
Note) General Expense ratio : Expense Ratio- Selling cost ratio
Combined Ratio
Loss Ratio
Expense Ratio
Administrative Ratio
13
Note) Long-Term New Premium Mix : Excluding one-time payment
50.8%
49.2%
47.8%
Industry Avg
52.8%
47.2%
45.7%
Top 4 Avg
52.8%
47.2%
45.9%
D
52.6%
47.4%
47.2%
C
50.3%
49.7%
48.9%
B
54.3%
45.7%
43.3%
A
34.8%Savings-type
65.2%Protection-type
Protection-type monthly payment 63.4%
Meritz
Long-Term New Premium Mix
U/W Profit- (#1 leader in efficiency of Long- Term line)
#1 L/R in industry #1 C/R in industry
Meritz Top 4
85.0%
82.5%
77.5%
86.6%
84.4%
82.4% 82.2%83.3%
89.6%
78.8%
80.0%
88.8%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
Meritz Top 4
103.7%
101.3%
99.0%
103.6%
101.5%
103.4%
101.3%100.5%
98.4%
101.2%
107.0%
104.4%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
Meritz Top 4
14
69.9%75.5%
84.7% 86.0% 90.2%80.9%
77.6%
FY2008 FY2009 1H.FY2010 3Q.FY2010 2010.10 2010.11 2010.12
L/R
22.7%
25.7%27.7% 28.4% 28.9% 31.2%
29.1%
Accident ratio
Issue : Auto L/R
) * : 50 / 10%
Auto L/R & Accident Ratio
Countermeasure for Auto Insurance
Note1) Accident ratio = # of accidents/Valid automobiles. Increased # of auto accidents since diversification of Premium standard ($500 Max $ 2,000) in Jan 2010
Note2) The figures of Oct-Dec are based on each month
19,013
22,040 21,87422,815 23,547 24,162
26,380
# of Accidents
E/R 2.1%p2011.4Limit Expectation Expense to 40%Sales cost limit
2011.2Current min discount rate 40% 30%Expand discount rate for no-accident driver
2011.2Surcharge only people with penalties
Expand to people with finesReform traffic violations
surcharge system
2011.1QRent with domestic cars for the accidents with imported carsRationalize rent car price
Classification
L/R 1.9%p
Improvement
2011.2
2011.2
Effective Date
10yrs or more/10% premium discount for below 1,600ccDevelop product for low-incomes (Decrease price for small cars)
Switch to Proportional deductibleFrom fixed amount ($50)
variable rate (20% of loss amount)
Contents
C/R 4.0%p
15
36.5% 34.9% 32.6% 29.9% 26.7%
9.3% 16.3% 22.1% 27.8% 33.5%
30.7%28.2%
26.6% 24.5% 22.3%
23.5% 20.7% 18.7% 17.8% 17.5%
24.5%
35.7%
22.1%
17.8%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
Property, etcDeathLiving Benefit Non-GuaranteedLiving Benefit Guaranteed
Continually expanding Life NonContinually expanding Life Non--Guaranteed MixGuaranteed MixIssue: Continually Expanding living benefit N/G Mix
78.676.5
40.334.4
33.6
40.744.644.2
57.256.5
52.451.247.4
64.3
107.3
109.7106.4
113.7
103.8108.7
101.0
94.0
68.568.2
108.7
84.1
79.1
76.273.6
70.6
FY05 FY06 FY07 FY08 FY09 FY10.12월
(Unit : %)
Death Property and etc
LB guaranteed LB non-guaranteed
Total
3Q.FY2010
Non-Guaranteed coverage renewal initiated in Oct 2010 ( 5 yr (sold in 2004), 3 yr (sold in 2007) )
Risk Premium Mix Risk L/R by each mix
Increase of renewal policy effect : FY2010 0.4%, FY2011 3.2%Increase of renewal policy effect : FY2010 0.4%, FY2011 3.2%, FY2012 8.2%, FY2012 8.2%
16Channel
GA(independent
general agency)
44.8%34.0% 30.3%
21.7% 22.8%
18.6%
22.4% 23.6%31.0% 34.9% 33.3%
12.2%14.6% 17.0% 19.2%
19.3%
24.4% 28.9% 29.1% 28.1% 25.9% 24.5%
20.3%
18.9%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
FC
TC
GA
Others
[Channel Mix]
Exclusive Channel
Multi-channel,
New-channel
FC
TC
Others
Employed
sales
Home-shopping, cross-selling,
on-line direct, etc.
Common
channel
Bancassurance
8.2%
Total 8.5%
Financial consultant4,238
Total consultant3,312
Traditional sales force2,224
Exclusive for commercial line corporate clients
72
16 banks6,018 branches
1,244 agenciesAbout 70,000
employees
In-force bizProfit margin
9.0%9.8%
11.2%
13.8%
9.4%8.8%
FY2005 FY2006 FY2007 FY2008 FY2009 3Q.FY2010
10.4%
9.8%
5.8%
Note) In-force biz profit margin : Based on FY2009 EV
[Sales force qualification exam market share]
[New contract premium portfolio by channel]
17Investment Portfolio (Focused on fixedFocused on fixed--income asset)income asset)
Total Assets exceeded W 7 Trillion, Investment Assets W 5 TrilliTotal Assets exceeded W 7 Trillion, Investment Assets W 5 Trillion, 5.1% Yieldon, 5.1% Yield
Total Asset
Total investment asset
Equity-method & real estate
Sub-total
Other
Stock-type asset
Performance-based asset
Fixed-income asset
(Unit: W bn)
5.1%189.518.0%-5,462.6-4,627.6-4,138.3
-
3.2%
5.9%
-15.6%
6.0%
-1.2%
6.6%
Yield
16.0%
7.5%
20.4%
74.5%
34.9%
23.5%
18.1%
G/R Profit
-
10.9
178.6
-4.7
18.6
-2.2
166.8
-
-
100%
-
-
100%
-
-
100%
1.1%
10.6%
5.9%
82.5%
Mix
0.7%
9.5%
5.7%
84.1%
Mix
1.3%
10.2%
4.1%
84.4%
Mix
921.7857.6805.7
4,540.93,770.03,332.6
47.827.443.9
482.3357.6338.9
266.5215.8137.9
7,001.5
3,744.3
2010. 12
6,035.0
3,169.3
2010. 3
5,265.5
2,811.9
2009. 3
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
18
Adj
ROE
Solvency RatioNote) Meritz FY2008 Adj ROE: Not reflecting RG Loss
TARGETTARGETZONEZONE
200%200%
15%15%
FY08
FY08FY08
• Adj ROE : 9.2%• Solvency Ratio : 189.9%
• Adj ROE : 26.2%• Solvency Ratio: 230.9%
Meritz 2nd Tiers
FY09FY09
DecDecFY10FY10
• Adj ROE : 19.4%• Solvency Ratio : 192.3%
• Adj ROE : 16.1%• Solvency Ratio : 260.0%
(RBC 291.6%)
Risk & Return Balance (#2 in Solvency Ratio & Adj ROE)
DecDecFY10FY10
FY09
• Adj ROE : 12.5%• Solvency Ratio : 233.3%
• Adj ROE : 21.0%• Solvency Ratio : 217.0%
19Contents
3
1
22
1 About Meritz F&MAbout Meritz F&M
3Q.FY2010 Financial Results3Q.FY2010 Financial Results
Meritz Financial Group TransitionMeritz Financial Group Transition
AppendixAppendix (3Q.FY2010 Financial Results)(3Q.FY2010 Financial Results)
-- 3Q.FY2010 Financial Results3Q.FY2010 Financial Results-- FY2009 Embedded ValueFY2009 Embedded Value
20
(1) The need to create synergy to secure revenue-based business and maintain stable market position under the current group business line
In order to overcome weaknesses each affiliates under Meritz group, the creation plan of recapitalization and synergy consolidation is in need to raise the necessary conditions
Comparison with other industry
Securities
M/SShare’s equity
Assets
1.3% 529.5 1,991.8
7.8% 2,450.2 13,147.8
-6.4% -1,920.6 -11,156.0
Asset Management
M/SShare’s equity
Assets
0.2% 7.8 8.1
8.6% 207.0 247.8
-8.3% -199.1 -239.7
Non-life Insurance
(Unit : KRW bn) M/SShare’s equity
Assets
Meritz 8.3% 680.0 6,035.0
Top 4 Avg 18.1% 1,992.0 14,523.9
GAP -9.9% -1,312.0 -8,488.9
(2) Need of diversification of financial business to provide comprehensive financial service
Payment
Deposit
Trust
Securities
Asset Management
Insurance
Variable Insurance
Financial Derivative
Credit Information
Loan
Foreign Exchange
Operating Assets ResearchConsulting
Function of Financial serviceNon-life
Financial
Investment
Asset
ManagementExclusive
Sales
Bank Life Insurance
Savings Bank
LoanCredit
Information
OperatingBusinesses
Non-OperatingBusinesses
Enhance customer’s loyalty through one-stop comprehensive financial serviceIn order to secure new engines for sustainable growth of the group, diversification of financial business is needed
Function of financial service and business line
Necessity of Financial Group Transition
(Source: Financial Statistic Information, FY09 Public data,)
21
[Reference] Meritz Group Financial Information
-2.1
14.0
15.3
0.06
15.4
3Q.FY10
0.4
1.0
3.0
6.9
9.9
3Q.FY10
0.03
15.0
12.2
0.5
12.7
3Q.FY10
35.9
308.9
637.3
4,345.7
4,983.0
3Q.FY10
91.2
61.9
831.7
6,169.8
7,001.5
3Q.FY10 FY2009FY2009FY2009FY2009FY2009
Capital 10.01.015.0308.961.9
(W Bn)
-0.5
9.5
0.02
9.5
Ritz Partners
0.3-1.024.1140.4Net
income
2.612.2678.4680.0Share’s Equity
5.20.52,956.85,355.0Liability
7.812.73,635.26,035.0Assets
Financial Information
Asset Management
SecuritiesF&M
Necessity of Financial Group Transition
22
(3) Need of proactive measure for division of manufacturing and sales of financial productsIn order to proactively respond to introduction of exclusive sales company for the sales of comprehensive financial products and development of Integrated-type channel, It needs to strengthen the competitiveness of the group’s sales company. Financial holding company structure will enable to share customer DB which will help sales company to grow.
BankNonLife
Life FinancialInvestmentCard Loan Asset
Management. . .
IndividualCustomer
CorpCustomer VIP. . .
Exclusive Sales Company
Insurance Channel development followed by diversification
Traditional channel
New SalesChannel
Open type Channel
IntegratedChannel
Solicitors/Traditional
Channel
Home ShoppingDirect sales
(TM/internet/Credit card/mail)
GA(Independent)
banc assurance
ExclusiveInsurance
sales channel
(4) Capital finance and Investment capacity
There is limit to provide comprehensive financial service as the amounts of investment affordability under the currentcorporate governance are KRW130 bn ~ 180 bn.
Necessity of Financial Group Transition
Meritz Fire
SecuritiesAsset
Management
FinancialInformation
servRitz Partners
30.5% 100% 100% 100%
• Total Investment affordability : KRW181.0bn• Amount invested : KRW143.1 bn
(invested to subsidiaries)• Remaining amount to invest : KRW 37.9bn
No affordability to invest
• Investment affordability
- KRW100 bn ~ 150 bn
Corporate governance and investment affordability
Major shareholder
21.4%
(Based on Sept2010, excluding foreign subsidiaries and grandson companies)
※ Meritz Securities' special account equity not included (0.2%)
Investment
Capacity
130~180 bn
Meritz Business Service
100%
23
(6) Provide Business efficiency for financial group
• restructuring, expansion of new businesses strategic rolestrategic role• prevent risk, trimming down overlapping resources managing rolemanaging role• Strengthening business through customers, channels, products operating roleoperating role
NeedNeedControl TowerControl TowerProvide business Provide business
efficiency for groupefficiency for group
Provide efficiencyProvide efficiencythrough focusing on through focusing on
core competencecore competence
• Improvement of management efficiency by integrating the common roles to
relevant subsidiaries while each company focusing on core competence
F&M
Securities
Asset Management
Ritz Partners
Financial Info-Service
Business Service
Common Function
· Brand mgmt/PR/IR · system mgmt / data maintenance
· purchasing · building lease/maintenance/administrative cost
· customer serv (call center) · wage/big 4 insurance/yr-end settlement
· HR/support/education · legal serv / bond follow-up control
· inflow mortgage · accting/ ledger mgmt / expense process
Holding company- Brand management
Shared Service Center-Customer service
-(call center)
maintenance, exclusive management company
-Building lease, facility management-Maintenance, purchasing, etc
(5) Need to structure an independent management system and to prevent subsidiary's risk diffusion
Despite F&M performances, business performance based on subsidiary can expose F&M financial performance to
decline due to current governance where F&M directly invest to subsidiaries, hence in need for governance transition
to protect policyholders.
Shareholders and subsidiary’s customers are concerned about losing confidence in independent management of the businesses under
current structure where F&M is directing variety of businesses that has different type of products, channels and type of risk
Necessity of Financial Group Transition
24
(1) Transition Method and StructureSplitting part of Meritz F&M subsidiary’s stocks, Treasury and part of cash assets to establish Holding Company. After IPO, Holding Company will buy Meritz F&M’s shares through tender offer to meet shareholders requirements for holding company (listed 30%, non-listed 50%)
Transition method
F&M
Asset Management
Financial Information
Ritz Partners
Securities
Major Shareholder
Holding Company
Holding Co
AssetManagement
Financial Information
Ritz Partners
Securities
Major Shareholder
F&M
Investment in kind(Tender offer
method)
21.4%
21.4% 21.4% + Investment in kind’s exchange shares
1st step : Meritz F&M Investment Division Split 2nd step : Tender offer for Meritz F&M
30.5 % 100% 100% 100%
Treasury(13.0%), part of cash asset
Division 30.5%+ 100% 100% 100%34.4%+
: Participation of regular shareholder’s in tender offer : Acquisition of Meritz Securities’ transferred cash assets transferred
Spin offs : After the split, distributing holding company’s shares proportionally to existing shareholders.
ex) For 1 share= Split to Meritz F&M 0.7049248 Holding 0.2950752
Meritz Business Service
Hanjin Korindo
51%Exception
Meritz Business Service
100%
100%
25
(2) Split assets breakdown
Transferring subjects
Transition method
Note) The numbers are estimated based on the division date and might vary depending on the financial status at the time of division
639.5
6,397.0
7,036.5
Meritz F&M
After the division
872.9
6,407.8
7,281.6
Before the division
316.6[Total Equity]
Deferred tax for previous securities and provision for retirement benefits
10.8Noncurrent liabilities
10.8[Liabilities]
Brand Trademark5.7Intangible Assets
F&M Treasury(83.3), Securitie’s(174.3), Asset management(12.0),
Financial Information(2.9), Ritz Partners(15.1), MBS(0.9) (5 subsidiaries’ stock price)
288.5Securities
Funds will be used to operate holding company and system construction 33.2Cash and
Deposits
327.4[Assets]
RemarksHolding company
Subjects
26
(1) Advantage in entering new biz in aspect of capital finance and investment capacity
Investment affordability of KRW 370 bn by reinstatement of Meritz Fire’s investment capacity and capital
finance of holding company. Advantage in aspect of capital raising in the case of entering into new
business through joint venture
Transition Effect
Group investment capacity
30
150
KRW 180 bn
150
150
70
Before After
KRW 370 bn
106%Holding s
Entering into New
Biz
Holdings
Fire SecuritiesAnnuityOn-line ins.Saving BankDomestic Credit
Domestic Credit Domestic Credit
J/VJ/V J/V
Direct Investment and J. Venture
- New biz
Securities
Fire
272727
(2) Opportunity to expand new biz according to the ease regulation for Ins. Holdings As Ins. Holdings allowed to have non-financial company , there are opportunities to enter into non-financial business for new business or to establish non-financial company for providing customer services in Group
Insurance Holdings
Insurance Company
Financial C. N.Financial C.
Financial company Non financial company
(O) (X)
(O)(O)(O)
(O) (O) (O) (O) (O)
(O)(O) (O)
(X) (X) (X)
(X)
30%(50%)
30%(50%)
100%
30%(50%) 20%(40%)
100% 100% 100% 100%
20%(40%)
20%(40%)
Exc. Bank, other ins.
Exc. Bank, ins.savings, Investment com., securities
Incl. relevant company with financing business
Exc. approved company by insurance Act.
Subsidiary
Granddaughter
Great Granddaughter
%-listed company, (%)-unlisted company minimum requirement for retention shares
(particular rules for ins. Holdings’ dominance on subsidiary company (the regulation for Financial holding company 25))
30%(50%)
Exc. Bank, other ins. Exc. Bank, ins.savings, Investment com., securities
Incl. relevant company with financing business
Incl. relevant company with financing business
Financial C. N.Financial C. Financial C. N.Financial C.
Financial C. N.Financial C. Financial C. N.Financial C. Financial C. N.Financial C. Financial C. N.Financial C.
Transition Effect
28
(3) FY2010 ~ FY2012 Expected Synergy effect
Under the holding company system, cross-sales to individual or corporate customers are allowed and
expansion of its strategy by directing of holding company will product synergy
Synergy Aspect FY2010 FY2011 FY2012 Total
Profit
Customer information
share0.1 1.3 1.5 2.9
Marketing 0.5 7.5 9.0 17.0
Cost Resource redundancy - 1.4 1.7 3.1
Total 0.6 10.2 12.2 23.0
(Unit: KRW bn)
Securities(9.9 bn, 43.0%)F&M
(10.4 bn, 45.2%)
Common(2.7bn,11.7%)
Transition Effect
With financial holding company law, sharing customer database among affiliates that would allow to manage customers and develop strategy to target different type of customers would produce various values
Customers, Products, and Geographic divisions (horizontally) can be distinguished and managed by Existing affiliates
(Vertically), hence generating synergy through trimming down of overlapping resources and business professionalism
Synergy by company
29
Maintain stabilized capital adequacy and high ROE and BPS
ROE
capital adequacy
22.0%
F&M + Holdings
25.1%
F&M + Holdings
14.9%
F&M + Holdings
HoldingsHoldingsHoldings Meritz F&MMeritz F&MMeritz F&M
19.9%23.7%0.2%
F&M(3Q.FY2010)
23.4%25.9%21.4%16.1%
FY2012FY2011FY2010
252.3%
-
2014. 3(K-IFRS)
292.3%
260.6%
2010.12afterBefore K-GAAP
Category
236.4
-
2013. 3(K-IFRS)
216.4%201.2%210.5%287.1%RBC
-181.1%187.3%264.9%Solvency
ratio
2012. 3(K-IFRS)
2011. 32011.3 @ the time of split
BPS
14,300
F&M + Holdings
11,830
F&M + Holdings
8,835
F&M + Holdings
HoldingsHoldingsHoldings Meritz F&MMeritz F&MMeritz F&M
14,02812,2288,683
F&M(3Q.FY2010)
14,47211,5798,8997,757
FY2012FY2011FY2010
Key indicators before and after the split
* IFRS will be applied starting in Apr 1st 2011: RBC after
* Meritz F&M ROE : Adj ROE
(Unit: Won)
30
■ Estimated P/L
FY2010(Unit: KRW Bn) FY2011 FY2012
Earned premium 3,365.8 3,957.6 4,566.0
Premium income 3,817.1 4,374.4 4,990.3
Premium paid 274.8 300.0 327.4Unearned premium
brought forward 377.7 554.2 671.0Unearned premium
carried forward 554.2 671.0 767.9
Incurred losses 1,227.9 1,232.9 1,385.3
Refund of LT insurance policy 551.8 861.8 1,022.3
Net operation expenses 828.1 985.4 1,143.8Increase in premium reserve for LT
savings-type 795.8 892.2 1,041.4
Net increase in policyholders’dividend reserve 7.2 8.2 9.4
Increase in catastrophe reserve 16.1 19.0 22.2
U/W profit -61.1 -41.9 -58.5
Net investment profit 244.9 284.0 339.6
Total operating profit 183.7 242.1 281.1
Non-operating profit -4.0 -4.0 -4.0
Net profit before tax 179.7 238.1 277.1
Tax 43.5 52.4 61.0
Net profit 136.2 185.7 216.2
■ Estimated B/S
FY2010
167.7 148.6 132.2 Others
641.0
184.9
412.5
43.6
6,456.8
169.7
283.8
135.6
5,867.7
7,097.8
84.7
1,056.7
95.4
188.0
1,528.8
4,772.6
711.7
5,484.3
(Unit: KRW Bn) FY2011 FY2012
Investment assets 6,576.9 7,826.1
Real Estate 728.1 744.9
Others 5,848.8 7,081.2
Non-investment assets 1,822.3 2,150.9
Outstanding receivables 209.0 232.3
Deposit 102.2 109.5 Unamortization of deferred
Acquisition cost 1,292.9 1,552.7
Special account assets 106.4 133.5
Total Assets 8,505.6 10,110.5
policy reserve 6,949.6 8,190.2
catastrophe reserve 154.6 176.7
other liabilities 331.4 387.0
Special account liabilities 214.2 270.4
Total liabilities 7,649.7 9,024.2
Capital 43.6 43.6
Capital Surplus 557.3 717.8
Other capital 254.9 324.9
Total Equity 855.9 1,086.3
[Reference] Meritz F&M Financial Statements
3131
■ Estimated B/S■ Estimated P/L
3.0 4.3 5.7 Intangible assets
(Unit: KRW Bn) FY2010 FY2011 FY2012
Cash and deposit 32.8 17.8 22.2
Securities 289.1 710.5 852.8
Tangible assets 0.1 0.1 0.1
Other non-current assets (deposits) 0.4 1.1 1.1
Total assets 327.9 733.7 879.1
Loan Payable - 41.9 83.8
Other liabilities 10.8 16.7 20.8
Total liabilities 10.8 58.9 104.6
Capital stocks 18.3 31.1 31.1
Capital surplus 317.6 569.6 569.6
Capital adjustments -33.0 -33.0 -33.0
other comprehensive income accumulated 13.7 13.7 13.7
Retained earnings 0.5 93.7 193.0 Total shareholder’s equity 317.2 675.1 774.5
(Unit: KRW Bn) FY2010 FY2011 FY2012
Operating income 0.8 111.9 140.6
Equity-method income 0.7 105.5 133.5
Interest income - 0.4 0.4
Earnings in Brand-usage 0.1 6.0 6.7
Operating expense 0.1 6.8 9.5
Equity-method loss 0.1 1.5 -
Interest expense - 1.0 5.0
Management cost 0.1 4.3 4.5
Total operating Profit 0.6 105.1 131.1
Profit before tax 0.6 105.1 131.1
Income tax (*) - - -
Net income 0.6 105.1 131.1
[Reference] Holdings Financial Statements
32
2010
1st Step
May~Aug
Main Task Yr/Month2011
5 6 7 8 9 10 11 12 1 2 3 4 5 6
1. Preparation for division
2. Board resolution of financial holding company
3. Financial holding’s preliminary application and approval
2nd Step
Oct~Mar
5. Board resolution for division
6. Shareholders’ meeting for division
7. Apply and approval of financial holdings
8. Division
3rd Step 9. Request re-listing of holding company/IPO
4th Step
May~June
10. Board resolution for tender offer and new shares issued
11. Proceed tender offer
(2010. 5. 19)
Holdings
Transition Schedule
(2010. 8. 5)
Important datesBoard resolution for division: Dec 1st 2010/ Shareholders’ meeting for division: Jan 11th 2011
Division : March 25th 2011. / Trading suspension : 2011. 3. 23 ~ 4. 8
Meritz F&M change listing : 2011. 4. 11 / Holdings listing : End of April 2011
33Contents
※
3
1
22
1 About Meritz F&MAbout Meritz F&M
3Q.FY2010 Financial Results3Q.FY2010 Financial Results
Meritz Financial Group TransitionMeritz Financial Group Transition
AppendixAppendix
-3Q.FY2010 Financial Results- FY2009 Embedded Value
34
17.5%
816.9%
21.0%
-3.5%
19.9%
10.3%
-5.5%
G/R
100.0%
2.3%
66.7%
2.2%
68.9%
20.3%
8.4%
Mix
2,867.3
66.2
1,912.9
61.6
1,974.5
584.7
241.9
3Q. FY2010
16.2%2,534.014.3%2,896.413.5%100.0%3,288.0Total
-30.4%7.6-26.5%5.6298.2%0.7%22.3One-time pymt
26.6%1,482.719.3%1,768.622.3%65.8%2,163.1Recurring
18.7%62.520.8%75.517.7%2.7%88.9New
26.2%1,545.219.3%1,844.122.1%68.5%2,252.0Long-term
2.1%685.56.0%726.7-4.8%21.0%691.8Auto
8.0%295.88.2%320.00.6%9.8%321.9Commercial
G/RG/RG/RMix
FY2007FY2008FY2009(KRW Bn)
0.0%p
6.0%p
-0.1%p
-0.6%p
-0.1%p
0.1%p
-1.0%p
G/R
3Q FY2010
8.2%
10.4%
9.1%
8.1%
9.0%
6.4%
7.1%
0.9%p9.8%-0.4%p9.4%-0.5%p8.9%New
0.1%p8.1%0.2%p8.3%-0.1%p8.2%Total
-1.3%p5.8%0.2%p6.0%3.1%p9.1%One-time pymt
0.4%p9.0%0.2%p9.2%-0.1%p9.1%Recurring
0.4%p9.0%0.2%p9.2%-0.1%p9.1%Long-term
-0.6%p6.4%0.2%p6.6%-0.4%p6.2%Auto
0.2%p8.7%-0.3%p8.4%-0.6%p7.8%Commercial
G/RG/RG/R
FY2007FY2008FY2009M / S
Appendix : Sales
35
5.3%p
16.4%
24.7%
6.1%p
4.5%p
3.2%p
24.2%
29.4%
6.1%p
-4.3%
3.5%
33.3%p
-1.6%
99.0%
G/R
79.7%
2,609.5
2,080.1
84.1%
87.2%
80.0%
2,010.9
1,608.7
80.9%
500.0
404.5
67.8%
98.6
66.9
3Q. FY2010
-2.2%p78.9%3.6%p82.5%-7.1%p75.4%Loss ratio
19.6%2,266.915.1%2,609.816.7%3,046.4Earned prem
16.3%1,788.420.3%2,152.96.7%2,296.8Losses
Total
3.0%p72.8%2.5%p75.3%2.2%p77.5%LT risk L/R (w/o IBNR)
-1.1%p77.1%3.5%p80.6%3.6%p84.2%LT risk L/R (w/ IBNR)
-2.3%p82.6%-3.8%p78.8%-1.3%p77.5%Loss ratio
25.8%1,500.619.7%1,795.524.1%2,228.1Earned prem
22.2%1,238.014.2%1,414.822.1%1,727.2LossesLong-term
-4.3%p74.2%-4.3%p69.9%5.6%p75.5%Loss ratio
7.5%641.45.0%673.32.1%687.2Earned prem
1.6%475.7-1.1%470.310.4%519.0Losses
Auto
6.8%p-
59.8%-
131.1%p-
189.9%(61.1%)
-151.3%p(-1.8%p)
38.6%(59.3%)
Loss ratio( w/o RG)
17.4%124.911.6%141.0-7.0%131.1Earned prem
32.5%74.8258.0%267.8-81.1%50.6LossesCom -
mercial
G/RG/RG/R
FY2007FY2008FY2009(KRW Bn)
Appendix : Loss Ratio
36
Sales Expense Ratio
-0.4%p23.9%2.3%p26.2%-1.5%p24.7%2.8%p22.6%Expense Ratio
-0.8%p12.5%-0.6%p11.9%-0.8%p11.1%0.1%p10.7%Admin Expense Ratio
2.6%p
2.9%p
16.4%
3.6%
-4.7%
21.0%
-7.3%
27.3%
8.9%
3.2%
G/R
3Q. FY2010
102.4%
11.9%
2,609.5
591.0
33.0
26.9
332.3
142.0
122.8
624.0
-2.6%p102.8%5.9%p108.7%-8.6%p100.1%Combined ratio
0.4%p11.4%2.9%p14.3%-0.7%p13.6%
19.6%2,266.915.1%2,609.816.7%3,046.4Gross premium earned
17.5%542.126.1%683.510.1%752.4Net expenses
5.0%51.63.1%53.2-10.7%47.5Expenses recovered
21.8%23.612.7%26.615.0%30.6Other expenses
19.9%296.638.7%411.49.7%451.3Sales-related
12.5%125.514.3%143.56.4%152.7Administrative
12.0%147.94.9%155.26.5%165.3Wages & benefits
16.3%593.724.1%736.78.6%799.9Expenses
G/RG/RG/R
FY2007FY2008FY2009(KRW Bn)
Appendix : Expense Ratio
Note) Sales-related expenses: acquisition cost/collection fees, commissions paid to agencies, acquisition cost, amortization, deferred acquisition cost, etc
Other expenses: loss adjustment expenses, co-insurance paid, reinsurance commission paid, etc
Expenses recovered: claim service fee recovered, R/I commission received, etc
37
100.0%
16.5%
-
3.1%
1.5%
4.5%
6.3%
12.7%
55.4%
80.4%
Mix
2,040.6
335.7
-
64.0
30.3
92.0
128.2
259.1
1,131.3
1,640.9
3Q. FY2010
100.0%1,552.8100.0%1,849.6100.0%2,274.1Total
15.4%239.013.8%2,56.012.1%274.5Savings
0.0%0.40.0%0.3--Corporate pension
3.9%60.93.6%66.33.4%77.5Personal annuities
2.8%44.02.5%47.21.8%41.9Bundle
12.6%196.29.0%167.16.0%136.5Disease
10.5%163.38.7%161.66.9%157.6Property
17.9%278.015.8%291.913.9%316.1Drivers
36.8%571.046.5%859.255.8%1,270.0Accident
80.7%1,252.582.6%1,527.084.5%1,922.1Protection-type
mixFY2007mixFY2008 mixFY2009 (KRW Bn)
57.5%
79.6%
1,262.1
1,012.0
-5.3%p
6.0%p
55.5%
44.5%
62.8%
73.6%
1,103.7
745.9
-1.2%p
-5.6%p
59.7%
40.3%
64.0%
79.2%
973.0
579.8
0.7%p
2.8%p
62.7%
37.3%
25th month persistency
13th month persistency
Savings premiums
Risk+loading premiums
3.1%p
0.8%p
55.6%
44.4%
60.6%
82.4%
1,133.6
907.0
Appendix: Long-term product portfolio
* Including one-time payment, 3Q.FY2010 Persistency: 6 months Average
38
100.0%
17.6%
3.9%
8.0%
12.8%
35.4%
60.1%
22.4%
Mix
79.1%
56.5%
70.6%
90.4%
101.1%
108.7%
102.2%
34.6%
L/R
FY2009Category
3Q. FY2010 FY2008 FY2007
L/R Mix L/R Mix L/R Mix
Death coverage 40.3% 22.0% 33.7% 24.5% 40.6% 26.6%
Living benefits 108.1% 60.1% 101.6% 57.7% 97.2% 54.7%
Medical treatment
115.0% 35.4% 107.1% 31.7% 97.8% 29.2%
Daily allowance 112.7% 12.3% 94.1% 13.5% 91.2% 12.9%
Disease 93.1% 8.0% 98.6% 8.5% 103.4% 8.7%
Other 67.3% 4.4% 90.1% 4.0% 98.5% 3.8%
Property/other 57.2% 17.8% 52.3% 17.8% 52.1% 18.7%
Total 84.1% 100.0% 76.2% 100.0% 73.7% 100.0%
* Loss Ratio: As of Gross Premiums Written, excluding IBNR
* 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
Appendix: Long-term product portfolio
39
83.9%
5.20
6.89
4.36
3Q. FY2010
81.0%
4.84
5.60
3.92
FY2009
86.5%68.5%Matching ratio
3.784.82Liability Duration
4.494.70Bond Duration
3.273.30Asset Duration
FY2007FY2008ALM
1.5%p
5.7%
87.7%
12.3%
4.03%
5.26%
4.18%
3Q. FY2010
1.5%p
5.8%
84.7%
15.3%
4.16%
5.36%
4.34%
FY2009
4.45%4.23%Variable
5.95%5.63%Fixed
23.4%19.3%Fixed mix
0.8%p-0.9%pSpread
5.6%3.6%Investment yield
76.6%80.7%Variable mix
4.81%4.50%Funding Cost
FY2007FY2008LT Funding Cost
Appendix : Long-term Funding Cost & ALM
Note1) Subject : LT/Pension account
Note2) RBC Duration : FY2009 Asset 4.34, Liability 4.08
1H.FY2010 Asset 4.86, Liability: 4.10
3Q.FY2010 Asset 4.89 , Liability 4.12
40
-
100.0%
14.4%
17.1%
1.3%
9.6%
11.4%
34.5%
4.1%
2.7%
0.0%
2.7%
4.8%
Mix
4.9%
4,627.6
667.3
790.2
62.1
446.1
525.4
1,597.6
190.2
126.3
0
126.3
222.2
FY2009
G/R G/R
-5.6%-2.8%0.2%p--5.1%Investment yield
100.0%3,624.0100.0%4,138.3-100.0%18.0%5,462.5Investment assets
11.1%402.316.0%662.4-1.4%p13.0%6.4%709.8Real estate
11.8%426.813.7%568.8-0.5%p16.6%14.5%905.2Loans
1.7%60.72.2%89.82.4%p3.7%226.4%202.6Other
7.6%276.110.3%427.4-0.8%p8.8%7.4%479.1Overseas securities
14.3%518.212.5%516.6-0.2%p11.2%16.9%614.1Investment funds
41.7%1,510.232.6%1,349.3-0.7%p33.8%15.6%1,847.4Domestic bonds
3.6%132.13.5%143.3-0.2%p3.9%11.4%211.9Equity-method stakes
2.7%96.13.4%142.40.2%p2.5%5.8%133.6Available-for-sale
0.0%0.50.0%00.5%p0.5%-25.7Trading
2.7%96.63.4%142.40.2%p2.9%26.1%159.3Equities
5.5%201.05.8%238.31.3%p6.1%49.9%333.0Cash & equivalents
MixMixMix
FY2007FY20083Q. FY2010(KRW Bn)
Appendix : Investment Assets Portfolio
41
905.2
1.2
22.1
928.5
132.1
60.2
130.3
77.2
399.8
290.7
238.0
0
528.7
3Q. FY2010
568.7
0.2
8.3
577.2
54.3
0
55.0
77.9
187.2
260.7
129.1
0.2
390.0
FY2008
790.2
1.1
13.3
804.6
157.9
50.8
44.6
47.5
300.8
275.1
228.6
0
503.8
FY2009
63.2Secured
8.7Bad debt Allowance
435.4Total
0Additional
deferred loan income
426.7
72.4
0
1.1
136.7
219.9
76.5
2.3
298.7
FY2007
PF
SOC related
Credit
Policyholder
Secured
Credit
Net Income
Corporate loan
Retail loan
(KRW Bn)
3.06%
1.19%
2.0%
65.2%
22.1
3.65%
928.5
7.2
10.1
16.6
1.5
893.1
3Q. FY2010
2.5%
1.7%
2.0%
74.9%
8.3
1.92%
577.2
1.8
0
9.3
0.6
565.5
FY2008
4.67%
1.02%
2.45%
144.6%
13.3
1.14%
804.6
2.0
3.8
3.4
11.2
784.2
FY2009
3.2%
4.8%
4.3%
48.3%
8.7
4.13%
435.4
0.9
1.4
15.7
2.1
415.3
FY2007
Substandard
Corporate
Retail
Coverage ratio(Provisions
/substandard & below)
Total
Delinquency ratio
Doubtful
Provisions
Estimated loss
Precautionary
NPL ratio
Normal
(KRW Bn)
Appendix: Loan Quality
Note1) Corporate Credit : Including Unsecured private placement bondsNote 2) Mortgage Companies : Private Equity-backed bondsNote 3) Corporate PF : Classify as PF ABCP loan as of Dec 2009
Note1) FSB Standard (including retirement accounts, 30 days Overdue principal and interest, Delinquency on Policyholder loan
Note2) JID PF loan 7.4 bn (Kumho Industry), Solyeon PF loan 3.7bn (Sungwon)
Note 1)
Note 2)
Note 3)
Note 1)
Note 2)
4242
(Unit: KRW bn)
Appendix : PF loan
Debtor Site/Project Constructor Loan amount Maturity NPL Remark
Sol Yeon C&DYong-in Complex
(Office & apartment)SungWon
Corporation 3.7 ‘10-10-19 Doubtful100% is reserved in bad debt allowancenote1)
Saenal, Co. Gimpo apartment Shindongah, NamKwang, Chonggu 10.0 ’12-12-14 3)
Pre-cautionary,
fixed
39.6% is reserved in bad debt allowancenote2)
Jeju Investment & Development, Co. Jeju ICC Anchor resort&hotel Kumho Industrial 7.4 ‘10-03-25
Pre-cautionary,
fixed
32.5%is reserved in bad debt allowancenote3)
N-mode House, Co.Wonhyo-ro Complex(Office & apartment)
Prime Construction, Dongah Construction 10.0 ‘12-04-09 Normal
PSIB Posco E&C office building POSCO Engineering 10.0 ‘12-10-16 Normal completed
Shin Dong D&I Co. Suwon Shin Dong urban development project
Samsung C&T Corporation 30.0 ‘12-09-28 Normal Permit in progress
C-First, Ltd Chong-na Complex(Office & apartment) PF ABL POSCO Engineering 20.0 ‘13-06-15 Normal
Yang Woo Construction Gimpo apartment Samsung C&T
Corporation 7.2 ‘12-05-26 Normal
Song-do Global Complex Development,
Co.Song-do A3 block apartment Lotte Engineering &
Construction 10.0 ‘13-11-30 Normal
S.L D&C, LtdChun-ho Dong Complex
(Office & apartment)Samsung C&T
Corporation 20.0 ‘14-08-24 Normal Permit in progress
Echo city J35 pole previous site development
projTaeyoung Cons,
KCC Cons3.0 ‘11-12-23 Normal Permit in progress
Total 132.1Note1) Sungwon corp applied for court (March’10.)
Note2) shindongah, Namkwang pushing for workout. Chonggu bankrupted (reserved 39.6 bn)
Note3) Geumho Industry applied for workout (Dec 09) reserved 23.95 bn
43
-20.8%
-24.6%
-21.7%
-
17.3%
-
-21.1%
5.1%
44.3%
3.6%
-4.8%
24.7%
19.8%
17.5%
16.4%
G/R
91.2
26.4
117.6
-1.3
189.5
-70.7
9.0
6.2
723.8
591.0
477.6
2,080.1
2,672.2
2,867.3
2,609.5
3Q. FY2010
-
-
-
-
95.5%
-
-
182.1%
37.2%
10.1%
-1.0%
-2.7%
14.8%
13.5%
16.7%
G/R
140.4
46.8
187.2
-4.0
207.6
-16.4
13.6
7.9
638.9
752.4
656.8
993.2
3,020.9
3,288.0
3,046.4
98.7%71.1--58.8Net income
254.5%29.8--19.7Incurred tax expenses
128.3%100.9--78.5Ordinary income
--1.1-1.8Non-operating income
12.5%179.2-40.8%106.2Investment income
--77.2--186.4Underwriting income
16.1%13.6--40.2Incr in catastrophe reserves
-22.7%6.0-53.6%2.8Net incr in policyholders’
dividend reserves
-5.3%441.75.4%465.6Incr in premium reserves
for LT savings
17.5%542.126.1%683.5Net operating expenses
52.1%591.212.2%663.5Refund of LT insurance polices
10.9%749.636.2%1,021.0Incurred losses
17.9%2.291.014.9%2,631.4Net premium written
16.2%2.534.014.3%2,896.4Gross premium written
19.6%2.266.915.1%2,609.8Net premium earned
G/RG/R
FY2007FY2008FY2009(KRW Bn)
Appendix : P & L
44
16.5%
31.1%
29.6%p
-5.6%
19.9%
0.2%
0.0%
22.3%
-0.3%
7.6%
17.2%
15.2%
9.4%
18.0%
16.0%
G/R
420.3
1,094.8
260.5%
-110.1
357.0
236.2
61.9
831.8
537.3
128.5
5,504.1
6,169.8
1,539.1
5,462.5
7,001.6
3Q. FY2010
12.6%282.114.6%323.316.1%375.3Solvency guidance
55.8%665.1-7.7%613.941.1%866.4Solvency amount
65.4%p235.8%-45.9%p189.9%41.0%p230.9%Solvency margin ratio
--787--28.1--116.6Capital adjustment
24.8%235.7-33.2%157.489.2%297.8Retained earnings
718.1%237.2-1.2%234.40.6%235.8Capital surplus
44.3%61.90.0%61.90.0%61.9Capital stock
75.4%456.1-6.7%425.659.8%680.0Total shareholders’
equity
30.5%461.316.5%537.40.2%538.9Other liabilities
10.2%146.0-27.5%105.812.9%119.4Cat reserves
16.6%3,501.119.9%4,196.611.9%4,697.0Policy reserves
17.8%4,108.417.8%4,839.810.6%5,355.0Total liabilities
25.8%940.519.8%1,127.124.9%1,407.4Non-invested assets
20.8%3,624.014.2%4,138.311.8%4,627.6Investment assets
21.8%4,564.515.4%5,265.514.6%6,035.0Total assets
G/RG/RG/R
FY2007FY2008FY2009(KRW Bn)
Appendix : B/S
45Appendix : Embedded Value (FY2009 EV 1,599.1 Bn)
Adjusted Net Worth
Value of In-force Business
6.7%-0.2%p6.9%-0.4%p7.3%Profit Margin
143.728.7%41.2184.924.3%45.0229.9Value of 1-year New Business
808.2-33.8%-273.3534.958.0%310.5845.4
Profit Margin 7.1%
416.4
1,224.6
FY2007G/RGrowthG/RGrowth
-
33.5%
-11.0%
0.7%p
139.7
-133.5
FY2008
7.8 %
556.2
1,091.1
-
35.5%197.5753.7
508.0
FY2009
0.7%p8.5%
46.6%1,599.1Embedded Value
Classification(Unit : KRW Bn)
[Reference] Value of In[Reference] Value of In--force Businessforce Business : Economic AssumptionEconomic Assumption
Risk Discount Rate : 11.5% [CAPM (Capital Asset Pricing Model)]
Inflation Rate : 3.0%
Tax : FY2010 ~ FY2011 : 24.2%, After FY2012 : 22.0%)
Required Capital : Applied 150% of solvency ratio standard
Investment yield : 5.1%
5.00
FY2008
5.255.10Investment Yield
FY2007FY2009(Unit : %)
46Appendix : Embedded Value (FY2009 EV by Risk Discount Rate )
Unit : KRW Bn
680.0Shareholder’s Equity
52.7
254.9
202.2
1,511.9
238.4
904.9
666.5
13.0%
RBC(RDR 11.5%)
Risk Discount RateCategory
Cost of Capital
PV of future profit 279.2279.2307.5
41.949.244.5
1,631.51,599.11,701.9Embedded Value
237.3229.9263.0Value of 1-year New Business
972.7972.71,051.3PV of future profit
186.6219.0194.8Cost of Capital
753.7
11.5%
856.5
165.4
845.4
10.0%
786.1Value of In-force Business
Adjusted Capital
Adjusted Net Worth
47
Thank you!!
Investor Relations Contacts:
822-3786-1157, 1158
http://ir.meritzfire.com
Recommended