CRC Credit Research Compendium
Menu
日本語English

Issuer Credit Research

Issuer Flash: Tongyang Life Insurance

Issuer Flash: Tongyang Life Insurance

Report date: 2026-05-29 Event date: 2026-05-29 Event title: Q1 2026 Corrected Report

1. Flash Conclusion

Tongyang Life Insurance (“Tongyang Life”)’s Q1 2026 results do not materially change the credit view set out in the latest issuer summary. In the corrected quarterly report dated 29 May 2026, the solvency margin ratio was revised upward from the preliminary 185.8% to a final 189.6%. This also represents an improvement from 179.8% at end-2025 and 155.5% at end-2024, and helps ease concerns over a decline in the capital ratio.

That said, earnings are still difficult to characterise as strong. Q1 consolidated operating profit was KRW 31.1bn and net profit was KRW 25.0bn, below operating profit of KRW 58.7bn and net profit of KRW 46.2bn in the same period of the previous year. Insurance profit improved to KRW 22.4bn from KRW 4.1bn a year earlier, but investment profit fell sharply to KRW 8.7bn from KRW 54.6bn. The increase in capital was also driven more by an improvement in other comprehensive income than by profit recognised through the income statement.

The credit conclusion is neutral to modestly positive. Expected support following inclusion under Woori Financial Group, the planned conversion into a wholly owned subsidiary, and the improvement in the solvency margin ratio support the credit profile. On the other hand, Woori’s support is not a legal guarantee, and Tongyang Life’s own investment profit, interest-rate, FX and hedging exposures, and the quality of its contractual service margin still need to be monitored. Because management’s target level has not been confirmed, the 189.6% ratio should not be read as evidence of ample capital headroom.

2. What Was Announced

Tongyang Life filed its quarterly report for the period ended March 2026 on 15 May 2026 and submitted a corrected report on 29 May 2026. The correction centred on the solvency margin ratio, which the company explained as the disclosure of the final figure following completion of the ratio calculation. After the correction, the available solvency margin amounted to KRW 4,345.7bn and the required solvency margin amounted to KRW 2,292.6bn.

On earnings, insurance profit was KRW 22.4bn, investment profit was KRW 8.7bn, operating profit was KRW 31.1bn, and net profit was KRW 25.0bn. In the company’s notes, the improvement in insurance profit was attributed to amortisation of the contractual service margin, amortisation of risk adjustment, and a decrease in onerous contract costs, while investment profit contracted due to a deterioration in insurance finance income and expenses.

3. Credit Read-Through

The most important point in these results is that insurance profit and investment profit moved in different directions. In the latest summary, the decline in insurance profit in FY2025 was identified as an item requiring reassessment of internal capital generation capacity. The improvement in Q1 insurance profit is therefore positive. However, because it also includes a decrease in onerous contract costs, it remains difficult to determine whether new business profitability, lapse rates, and product-level margins have improved.

Investment profit is the weak point in this set of results. Investment profit fell sharply to KRW 8.7bn from KRW 54.6bn in the same period of the previous year. For life insurers, investment assets, insurance liabilities, interest rates, foreign exchange, derivatives, and other comprehensive income all move at the same time, making it difficult to assess credit quality from the income statement alone. These results reinforce the existing need to continue monitoring asset-liability management and the sensitivity of investment assets.

The capital position is positive. The solvency margin ratio of 189.6% is 9.8 percentage points higher than at end-2025 and 34.1 percentage points higher than at end-2024. The liquidity ratio was 448.1% and the weighted non-performing asset ratio was 0.11%, showing no abrupt deterioration in capital, liquidity, or asset quality. However, the increase in capital was largely driven by an improvement in other comprehensive income, which could move in the opposite direction depending on market conditions.

With respect to the relationship with Woori Financial Group, these results do not weaken support expectations. A share exchange agreement with Woori FG was signed on 29 April 2026, under which 0.2521056 Woori FG common shares are planned to be delivered for each Tongyang Life common share. The process toward becoming a wholly owned subsidiary supports Tongyang Life’s strategic importance, but it is not a legal guarantee of its debt.

4. Key Numbers

Metric Q1 2026 Comparator Credit read-through
Insurance profit KRW 22.4bn Q1 2025 KRW 4.1bn Core insurance business recovered, but sustainability needs to be confirmed from subsequent quarters
Investment profit KRW 8.7bn Q1 2025 KRW 54.6bn Sharp contraction; the main driver of the earnings decline in this period
Net profit KRW 25.0bn Q1 2025 KRW 46.2bn Internal capital generation is still difficult to characterise as sufficiently strong
Total comprehensive income KRW 295.4bn Q1 2025 negative KRW 472.7bn Lifted accounting capital, but also indicates market sensitivity
Solvency margin ratio 189.6% End-2025 179.8% Improved on a final basis, but the distance from management’s target level has not been confirmed
Contractual service margin KRW 2,510.8bn End-March 2026 Source of future profit. Breakdown of movements and product-level quality remain unconfirmed

5. What To Watch Next

First, confirm whether the improvement in insurance profit is non-recurring. From Q2 onward, changes in the contractual service margin, new business value, lapse rates, and the gap between claims and assumptions should be monitored.

Second, analyse investment profit and other comprehensive income separately. In net profit, investment profit was weak, while in total comprehensive income, insurance contract finance income and expenses lifted capital. Foreign-currency securities, hedging, valuation gains and losses on debt securities, and sensitivity to the solvency margin ratio should be checked.

Third, monitor Woori FG’s capital policy after Tongyang Life becomes a wholly owned subsidiary. The progress of the share exchange, the integration policy with ABL Life, and the managed level of the solvency margin ratio are important.

6. Sources