Hanwha Life Insurance‘s third-quarter operating income surged by 134.6 percent on-year to 206.9 billion won ($185.5 million), mainly due to a lower loss ratio, the company said Friday.

An increase in sales of Hanwha Life‘s guaranteed products has reduced its ratio of insurance claims to premiums, officials said. 

The company’s third-quarter earnings was also driven by a decline in the insurer’s reserves set up to cover claims of variable life insurance products, through which its subscribers can invest some of their insurance fees into stocks or bond products and then share the return on investment with the insurance firm. As the local stock market has continued uptrend in recent months, Hanwha Life could avoid making such reserves for variable life insurance claims due to investment loss, which decreases a company’s net profit, they said. 

Meanwhile, the insurer’s net income posted 148.9 billion won in the same period, up 104.1 percent from a year earlier. Its premium income rose 12.8 percent to 3.44 trillion won, while a risk-based capital ratio, a barometer of financial stability, recorded 265.4 percent as of end-September, up 39.7 points from the previous year. 

“We will continue to make profits from various insurance products and properly manage volatility of interest profit and loss,” said Kim Hyun-chul, chief finance officer of Hanwha Life. 

By Choi Jae-hee (cjh@heraldcorp.com)