Mercuries Life Insurance Sets 2025 CSM Target at NT$15 Billion, Q1 Balance Reaches NT$64.4 Billion

Mercuries Life Insurance (三商壽) held an investor conference today, reporting a self-reported cumulative net profit after tax of NT$3.37 billion for the first four months of the year, with earnings per share of NT$0.57.

According to a press release from Mercuries Life Insurance, benefiting from a cumulative gain of 9,963 points in the Taiwan stock market in the first four months of the year, the company's equity asset profitability improved, driving cumulative net investment profit to NT$12.31 billion for the period. Net worth reached NT$86.7 billion at the end of April, an increase of NT$22.1 billion from the IFRS 17 opening balance on January 1 this year. The net worth ratio was 6.46%, and total assets reached NT$1.62 trillion.

Mercuries Life Insurance noted that first-quarter first-year premiums (FYP) were NT$12.5 billion, up 24% year-on-year, and first-year premium equivalents (FYPE) were NT$2.5 billion, up 17% year-on-year. In terms of protection-type product sales, first-quarter long-term health insurance FYP grew significantly by 60% compared to the same period last year. As new interest-rate-sensitive life insurance products were gradually launched across distribution channels, first-quarter interest-rate-sensitive life insurance FYP grew 18% year-on-year. Investment-linked product FYP was NT$11.1 billion, also up 24% year-on-year.

Mercuries Life Insurance stated that it will continue to launch various new life, health, and accident insurance products, aiming to effectively increase sales of protection-type products to accumulate CSM. It will also continue to sell investment-linked products to provide a stable source of profit.

According to data, Mercuries Life Insurance's CSM balance on the opening date of January 1 this year was NT$61 billion. Adding NT$3.8 billion from new contract CSM in the first quarter, deducting NT$0.9 billion released to profit or loss, and adding NT$0.6 billion from other items, the cumulative CSM balance increased to NT$64.4 billion by the end of the first quarter.

Regarding future CSM growth plans, Mercuries Life Insurance stated that it will continue to launch new products with high CSM contributions, such as health and accident insurance, expecting new contract CSM contributions to grow at a double-digit rate annually. The new contract CSM target for this year is NT$15 billion.

Mercuries Life Insurance pointed out that it has adopted a currency amortization system this year, reducing hedging position requirements. Additionally, with ample foreign exchange reserves, the foreign exchange reserve balance reached NT$38.29 billion by the end of April.

In response to the impact of rising inflation concerns due to the US-Iran conflict and rising bond market interest rates, Mercuries Life Insurance stated that its stock selection strategy this year will expand allocations to large-cap blue-chip stocks with stable high dividend yields, high business visibility, and strong long-term global competitiveness, while adjusting bond positions as needed to cope with market volatility.

The insurance industry is transitioning to International Financial Reporting Standard 17 (IFRS 17) and the new solvency regime (TIS) this year. Under IFRS 17, profits from selling insurance policies are not recognized immediately but are gradually recognized as services are provided. Therefore, the realizable profit from each policy sold is treated as the Contractual Service Margin (CSM). CSM is considered a key indicator for measuring an insurance company's future profitability. (Editor: Yang Lanxuan) 1150603