The net income of South Korea's insurance companies dropped 2.3 percent on-year in 2016 due to low performance by life insurers, data showed Tuesday.

They reported a combined net profit of 6.16 trillion won ($5.37 billion) for the year, versus 6.3 trillion won in 2015, according to the Financial Supervisory Service.

Life insurers' net income decreased 25 percent to 2.69 trillion won, while that of nonlife ones jumped 27.7 percent to 3.46 trillion won.

"When it comes to life insurance companies, an increase in claims paid exceeded an increase in premium income. This contributed to expanding losses on insurance income, causing the decline in life insurers' net income," the FSS said.

Nonlife insurers' earnings improved partly because of a lower loss ratio that helped reduce losses on auto insurance.

Meanwhile, local insurers' premium income totaled 195.1 trillion won in 2016, up 2.9 percent from 189.5 trillion won a year earlier.

Their aggregate assets grew 8.7 percent to 1,033.5 trillion won, with return on equity falling 0.6 percentage point to 6.43 percent. (Yonhap)