Mirae Asset Life Insurance Amplifies Growth with Dual Strategy
Mirae Asset Life Insurance is embarking on a strategic initiative to bolster its business model, reminiscent of the investment and insurance approach used by Berkshire Hathaway. With a significant increase in net profits during the first quarter—reporting 53.4 billion won, more than double the previous year's 24.8 billion won—the company is positioning itself for growth in both traditional insurance markets and innovative investment sectors.
The firm is actively pursuing a dual strategy. On one hand, it aims to enhance its protection insurance offerings. On the other, it seeks to broaden its portfolio through proprietary investments (PI), particularly by leveraging Mirae Asset Group’s international network. This approach reflects an intent to diversify amidst a competitive South Korean insurance market where growth in traditional life insurance sectors appears to be plateauing.
In a move to manage its operations more efficiently, Mirae Asset Life has introduced a system splitting its assets into an asset-liability management (ALM) account and a PI account. The ALM account focuses on aligning assets and liabilities to maintain financial stability, ensuring a foundation for the company’s investments. Currently, domestic bonds make up nearly half of its 20.1 trillion won in investment assets, with a stable ALM matching rate of 109.1%.
To accelerate its PI endeavors, the company has begun investing in tech-focused firms such as Rebellions, an AI chip manufacturer, and is considering other tech investment opportunities globally. This aligns with its broader ambition to emulate the investment success of Berkshire Hathaway.
Mirae Asset Life is also dedicating efforts to enhance its core insurance business through a "two-track strategy" by increasing the profitability of its products. This strategy includes strengthening protection insurance sales and expanding its fee business (Fee-Biz).
First-quarter results show a growth in the company's contractual service margin (CSM) to 150.7 billion won, led by a rise in the health and injury insurance sectors. The company’s variable insurance reserves have also seen a significant increase, reaching 13.3334 trillion won, with products like the Global MVP maintaining a strong presence in the market.
A company representative emphasized the initiative's focus on sustainable growth, leveraging the core insurance business, robust financial management, and the integration of AI innovations to deliver long-term value for customers and shareholders.