By Kim Jae-won
Foreign insurance companies are spending a gloomy Christmas season following poor performances and rumors that their global headquarters will withdraw from Korea.
Local units of ACE, Allianz and BNP Paribas Cardif posted net losses worth tens of billions won in the third quarter, hit hard by low interest rates and underperforming returns.
ACE Korea, the local affiliate of Switzerland-based ACE Group, logged a net loss of 13.7 billion won from July to September, an even worse result than its 3.4 billion won loss a year ago, according to Korea Life Insurance Association data.
ACE said the poor figures were largely because the company set apart more reserves for insurance payouts.
The net loss of Allianz Life Insurance, the Korean operation of German insurer Allianz, dropped 2.7 billion won to 10.7 billion won during the same period. The company said the improvement, although still negative, was the result of efforts to cut costs.
BNP Paribas Cardif Life Insurance, a local life unit of French financial group BNP Paribas, posted an 11.9 billion won net loss in the third quarter, after posting 8.4 billion won net profit a year ago. The company said the result was largely due to a devaluation of stocks that it owned.
"Foreign insurance companies are going through tough times," said an industry source.
Worse, rumors are spreading quickly that some global insurers will pull out of Korean market, although the companies deny this.
Industry sources said U.K. financial group Prudential was seeking to sell, PCA Life Korea, and had appointed Morgan Stanley as lead manager.
PCA Life's net profit plunged 5 billion won to 12.7 billion won in the third quarter from the previous year. Lower insurance premiums and rising business costs contributed to the poor performance, the company said.
Analysts said that foreign insurance companies were struggling to keep afloat in the local market which was being saturated and losing steam.
"The reasons for the worsening profitability are more like structural problems than temporary things," Korea Insurance Research Institute researcher Yoon Seong-hoon said in a report. "These include low economic growth, an aging society, technological changes and regulations."
The nation's life insurance market is dominated by the three largest local players ― Samsung, Hanwha and Kyobo ― which hold more than a 60 percent market share.
Foreign insurance companies are spending a gloomy Christmas season following poor performances and rumors that their global headquarters will withdraw from Korea.
Local units of ACE, Allianz and BNP Paribas Cardif posted net losses worth tens of billions won in the third quarter, hit hard by low interest rates and underperforming returns.
ACE Korea, the local affiliate of Switzerland-based ACE Group, logged a net loss of 13.7 billion won from July to September, an even worse result than its 3.4 billion won loss a year ago, according to Korea Life Insurance Association data.
ACE said the poor figures were largely because the company set apart more reserves for insurance payouts.
The net loss of Allianz Life Insurance, the Korean operation of German insurer Allianz, dropped 2.7 billion won to 10.7 billion won during the same period. The company said the improvement, although still negative, was the result of efforts to cut costs.
BNP Paribas Cardif Life Insurance, a local life unit of French financial group BNP Paribas, posted an 11.9 billion won net loss in the third quarter, after posting 8.4 billion won net profit a year ago. The company said the result was largely due to a devaluation of stocks that it owned.
"Foreign insurance companies are going through tough times," said an industry source.
Worse, rumors are spreading quickly that some global insurers will pull out of Korean market, although the companies deny this.
Industry sources said U.K. financial group Prudential was seeking to sell, PCA Life Korea, and had appointed Morgan Stanley as lead manager.
PCA Life's net profit plunged 5 billion won to 12.7 billion won in the third quarter from the previous year. Lower insurance premiums and rising business costs contributed to the poor performance, the company said.
Analysts said that foreign insurance companies were struggling to keep afloat in the local market which was being saturated and losing steam.
"The reasons for the worsening profitability are more like structural problems than temporary things," Korea Insurance Research Institute researcher Yoon Seong-hoon said in a report. "These include low economic growth, an aging society, technological changes and regulations."
The nation's life insurance market is dominated by the three largest local players ― Samsung, Hanwha and Kyobo ― which hold more than a 60 percent market share.
