Good morning, and good evening. Thank you all for joining the conference call for the earnings results of Samsung Fire & Marine Insurance. This conference will start with a presentation, followed by a Q&A session. If you have a question, please press star and one on your phone during the Q&A. Now we will begin the presentation on Samsung Fire & Marine Insurance's first quarter earnings results of the fiscal year 2024. [Foreign language] Good morning. I am Jae-hong Kim, Head of IR at Samsung Fire & Marine Insurance. Thank you very much for joining us for this earnings presentation. We would like to just provide you with a brief update of our business results, followed by a Q&A session. Going forward, our focus would once again be on the Q&A. [Foreign language] First quarter 2024 consolidated pre-tax profit was KRW 917.7 billion, with net profit attributable to majority interest recording quarterly record of KRW 701 billion, which is up 14.6% versus last year. [Foreign language] For long-term insurance, driven by higher amortization of CSM and stable control of experience variance, insurance profit reported KRW 446.2 billion, which is up 6.3% year-over-year. [Foreign language] On the back of stronger competitiveness in terms of product and channel, New Business CSM expanded by 30.6% year-over-year, bringing CSM volume to KRW 13,712 billion as at the end of the first quarter, which is an increase of KRW 409.2 billion year to date. [Foreign language] Competition deepened for auto insurance, and in the face of adverse premium trend, while we were able to respond strategically, it led to an expansion of our market dominance and an improved claims efficiency. Insurance profit came in at KRW 102.5 billion, sustaining the profit streak. [Foreign language] General insurance saw growth from both domestic and overseas businesses, driving insurance revenue up by 13.6% year-over-year. However, due to high loss events overseas, loss ratio inched up 3.3 percentage points, and insurance profit fell 4.2% year-over-year, reaching KRW 55.1 billion. [Foreign language] Thanks to efforts placed behind improving efficiency of management, aimed at enhancing the running yield and on higher valuation gains from alternative investment, investment yield was 3.65%, improving 0.25 percentage points versus last year, and investment profit reported KRW 742 billion, an increase of 13.2% year-over-year. [Foreign language] This ends the first quarter update. We would be happy to take your questions now. [Foreign language] Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. The first question will be provided by Hong-jae Lee from Hyundai Motor Securities. Please go ahead with your question. [Foreign language] Yes, good morning. Thank you for taking my question. I am Lee Hong-jae from Hyundai Motor Securities. I would like to ask you two question. First question is on your capital ratio, particularly if you could highlight some of the key elements that had impacted your required capital, such as how big was the impact from the introduction of the actuarial assumption-based risk amount and also the lower mass lapse segmentation? Second question is regarding your domestic project financing exposure, what is the extent of that exposure? Also including the overseas CREs, if you could provide some color as to what your exposures are, and also what is the amount of accumulated provisions that you have so far, accumulated provisions, as well as the loss that has been booked? And until the end of this year, would there be any additional loss that you will need to recognize? [Foreign language] I will respond to your first question on required capital. I am the Head of the RM division, Lee Yong-ho. There are two elements regarding this question, which has to do with, number one, the segmentation of the mass lapse shock, and the second is the new introduction of the actuarial risk assumption-based risk amount. [Foreign language] Relating to the mass lapse risk, which is part of the insurance risk, in the past, there was just one category, but that's been segmented into two, one for protection, the other for savings. There is a positive impact on the K-ICS Ratio by about 10 percentage points. [Foreign language] The second factor that had an impact is the new introduction of the actuarial function-based risk amount, and that actually is in the form of an experience variance for the expenses, and that has an impact of minus 10 percentage points. [Foreign language] So all in all, if you put together the impact from the segmentation of the mass lapse as well as the application of the actuarial risk amount, the impact offset one another. Thank you. [Foreign language] I will respond to your second question. I am Won-jae Choi, VP of Finance Planning Team. [Foreign language] All of the PF loan exposure that the company has as of end of March is KRW 2.6 trillion. All of the assets that we are exposed to are all exposures to the mother portfolio, mother project financing, and hence, at this point, there is no issue regarding asset quality. [Foreign language] Regarding the provisions for bad loans that we've set aside, after also reflecting and being in compliance with the guideline that the supervisory authority has announced at the beginning of year, so including that amount, currently, our provision stands at KRW 10.1 billion for the PF loans. [Foreign language] Also for our overseas real estate exposure, we have in total KRW 1.3 trillion. [Foreign language] Most of these assets that we hold are in the form of funds. Hence, it is recognized in terms of valuation, gains or losses. [Foreign language] So as of last year, we've already booked from the for these overseas property assets, so we have valuation losses of KRW 140 billion. For this year, our projection is that we believe that we will be able to significantly downsize that amount to around KRW 30 billion-KRW 40 billion. [Foreign language] Thank you. We'll take the next question. [Foreign language] The following question will be presented by Myung-wook Kim from JP Morgan. Please go ahead with your question. [Foreign language] Thank you. There are two questions that I would like to ask. First is, I would like to first thank you for shedding light on the company's mid- to longer-term capital plan. If we look at the capital plan that you've shared, we see that, if there's an excess capital of K-ICS Ratio of 270%, that you would use that proceeds to actually make that distribution. My first question is, but if you then compare that to the previous slide that you've shared, you also have adjusted basis K-ICS Ratio, which is based upon the capital that the company actually holds in force. So going forward, if there were to be some changes in the K-ICS, would you be able to also change the threshold of a capital adequate capital level of that 220% that you state on your slide? Because in some other countries, we see that the CSM portion seems to be comparatively less reflected in such calculations. And also, second question is regarding your capital allocation. If we look at your new CSM growth, it's at 30%, which is quite impressive. To what extent do you think that this double-digit growth in your new CSM is sustainable going forward? If you believe that such very steep growth of the market and the insurance business is possible within Korea compared to Asia or other DMs, do you think that there could be more emphasis on allocating your capital for the domestic insurance business? [Foreign language] Yes, this is CFO Jun-ha Kim. I will respond to your first question. Yes, we are showing you the adjusted K-ICS Ratio in the slide, but once again, that is actually not an official figure. But we just wanted to share with you, and so that adjusted K-ICS Ratio, we do not use that as the baseline for the decision making of the company. But the reason why we show that with you is because of the possible issues relating to the fluctuations or the volatilities. So we, based upon the guideline that the FSS has announced, which is 200%, that's why we've added that 20% additional buffer. So if the standard is changed at the supervisory authority, then I'm sure that the, you know, the K-ICS that we use as our baseline can also be subject to certain changes. [Foreign language] Regarding the second question on allocating the capital, so which is the access capital that is, and tying that with the steep CSM growth of our long-term business, I would first have to say that no one can predict what the growth rate is going to look like as we go forward. Who can say for sure that next year we will also see a double-digit growth? Now, within Korea, and when it comes to the health insurances, the whole social trend of aging society, we've been able to verify, is that it is not necessarily a negative issue for the growth of the healthcare insurance business. [Foreign language] Also, to elaborate, last year, we've really focused on realigning our long-term businesses, product and channel portfolio, and we've seen a very steep increase in the CSM multiple. But this year it had come down to around 15x and we are sustaining that level. So going forward, the 15x CSM multiple will be used as our key baseline, and at this point, we're thinking very hard as to how we're going to draw up our CSM strategy for our long-term line. [Foreign language] Thank you. Next question, please. [Foreign language] The following question will be presented by Byung-gun Lee from DB Financial Investment. Please go ahead with your question. [Foreign language] [Foreign language] Good morning, I am Byung-gun Lee from DB Financial Investment. First of all, I thank you for the good results this quarter. My first question relates to your New Business margin. The multiple, CSM multiple has come down quite significantly, and I think we are now back to the level that we've seen Q1 of last year. You say that this was intended, but even if you compare this with your Q4 figures, there's been a quite a bit of a decline. So would like to gain some understanding as to why this is the case. So, for example, there was change in the discount rate, and I would presume that this did not have any significant impact on P&C insurers, but there would have been some impact, and also product changes in your product portfolio. So if you could provide some color as to the reasons behind why we are seeing the CSM multiple go down so significantly, that would be quite helpful. And on a QoQ basis, even if the figure that we've seen last quarter and two quarters ago were too high, still, that, the dip is quite significant, so would like to gain some understanding there. And my second question is on your mid to longer term capital plan. We're very grateful for your sharing of this information, but I think at the end of the day, what's important is the timeline when this capital plan can be actually implemented and executed. You say that there is a buffer, but I'm just wondering whether all the other aspects that are currently being discussed, including the discount rate changes, is incorporated in this plan that you have on page 11. So would like to gain some understanding as to the timeline. When will we be able to see the implementation of this plan that you share with us? [Foreign language] First, I will respond to your first question. I am Young-hyun Cho, Vice President of Long-Term Insurance Strategy Team. Regarding the question, as to the changes or the decline in the CSM multiple. In January, there has been some adjustment in the assumed rate, and we've made some changes on our products, and that had driven down the CSM multiple. And in Q1, we expanded our top line revenue, which was GA driven. Because of such shifts or changes within our top line revenue portfolio, that had an impact of bringing down the CSM multiple. [Foreign language] Regarding the impact from the discount rate adjustments, there is no meaningful impact from the discount rate changes. Regarding the reshuffling of the portfolio going forward, we're going to focus on improving the efficiency by minimizing the attrition or the churn out of our subscriber or the customer base, and through a stringent management of poor contracts. With regards to the second driver, which was the increase in the revenue share or revenue portion coming from our GA channel. Through the efforts, we are very committed on improving our mid to longer term CSM multiple. [Foreign language] This is the CFO, Jun-ha Kim, responding to your question. I mentioned previously that we set aside about 20% as a volatility or fluctuation buffer, and I, I understand your question to be whether we've incorporated the recent development and discussions that are ongoing relating to the rule and regulatory changes that's been initiated at the FSC level regarding the insurance market reform. Since we do not know the concrete direction towards which such rule changes would take place, we have roughly set aside 20% as a buffer. But once the details are ironed out and we know of the concrete changes that will impact our accounting basis, then we would, at that point in time, would have to then incorporate that into our planning. [Foreign language] Regarding your second question, second part of the question on the timeline. If you look at the slide that we've shared, it shows the basis upon which we will make the shareholder return decision, which is the target of ROE, as well as the solvency capability of the company. We also write this method. In the past, it was in the form of cash dividend payout, but going forward, we've also included additional options such as share buyback and cancellation. It would be great if I was able to share with you a specific timeline, but still, as I mentioned, there are changes that are upcoming regarding the baseline and the standard by the authorities. It will be difficult for me to give you a specific month in terms of the timeline. Having said that, because this plan is based off of the outcomes that we will see at the end of the close of financial year 2024, our objective is to apply it to that point in time when we make the shareholder return decision. So I can tell you that, going forward from that 2024 result-based shareholder return, these approaches will be applied. [Foreign language] Thank you. We'll take the next question. [Foreign language] The following question will be presented by Jun-seop Jung from NH Investment & Securities. Please go ahead with your question. [Foreign language] Thank you for taking my question. I also have a question on your capital management policy. Two questions. If you look at slide 11 on the excess capital, you say that you will use that either for shareholder return or domestic business and overseas business expansion. For domestic business growth, does this mean that you will invest more into your core insurance business, or you will focus more on investing into other high margin capital? I'd like to just gain some color as to what you mean by domestic business growth. And second is, in terms of the method of shareholder return, you've mentioned that you're also considering shareholder treasury share buyback and cancellation. But I remember that in your previous earnings call, you said that there are certain issues regarding the subsidiary status in vis-à-vis the equity that is held by Samsung Life Insurance. Wondering whether that issue has now resolved, or have you found an alternative way to go about this issue? [Foreign language] This is, CFO. Responding to your question on excess capital, we are in the process of developing and devising specific detailed plans for how we will use the excess capital. As mentioned by you, either domestic business, which has to do with the insurance business, and also making investments, both domestic and overseas. So at this point, we are taking stock of what the demands and requirements are from each of our business units. We're in the process of collating that information and reviewing that. So, it will take the form of expanding investments into assets, both domestic and overseas, and also for the domestic insurance business, doing additional risk taking, especially on the healthcare line. [Foreign language] Regarding the expansion of our global business, first off, for Singapore, Samsung Singapore, the decision has been made to increase capital in the amount of KRW 160 billion for additional equity holdings or expanding our equity holdings. For instance, for Canopius, the other counterparty had made the request, and we are in the process of reviewing expanding our equity stake at Canopius at this point. [Foreign language] Regarding the second question on shareholder treasury share, share buyback and cancellation, previously, you are right. We've said there are certain issues regarding the inclusion as a subsidiary vis-à-vis Samsung Life, but the situation now has changed a bit with regards to the shares of Samsung Fire & Marine held by Samsung Life, as well as the treasury shares of Samsung SFMI. Our position is to maintain that holding for the benefit of stability of our governance structure, and if need be, that aspect will also further expand. So yes, we are looking into treasury share buyback and cancellation as an option, but if that decision is made, it will be done through the market. The reason why we are unable at this point to make any official announcement is because it is currently under review, and once things become much more confirmed, much more finalized, we will be able to come back to you with a clearer positioning. [Foreign language] Thank you. Next question, please. [Foreign language] The following question will be presented by Hye-jin Park from Daishin Securities. Please go ahead with your question. [Foreign language] [Foreign language] Thank you. I just have two very simple follow-up questions and one point that I just would like to double check. First question is that there's been changes in the assumptions for your persistency and lapse ratio in Q4, and the CSM adjustments are quite big in terms of it's the negative figure that we are seeing. And I understand that your intention is to reduce the size of the deficit, the shortfall. So, what is your outlook for the CSM adjustment going forward? And your investment gain has been quite good. Is this just a non-recurring? Is this a one-off thing? And one point that I would like to check is that very happy to see that you've been very progressively sharing with us what your going forward capital management policy looks like. But I remember that last quarter, you said that within the first half of the year, you will be able to announce officially as to what your capital stance is or capital payback stance is. But you've, in your, answering, you've talked about the end of 2024 results? So does that mean that we have to wait and see up until the end of FY 2024 to see whether there is going to be any share buyback and cancellation? Is my understanding correct? I just wanna double check. [Foreign language] Yes, responding to your question, I'm VP of Long-Term Insurance. The amount itself on a year-over-year basis, we see an improvement of KRW 45 billion. [Foreign language] So in terms of the long-term products for the persistency ratio, for the short term as well as the longer horizon persistency ratio, we are managing and controlling that process. So from the time a policy is executed, we are very stringently managing and controlling the onboarding, the acquisition process. So going forward, from the second half of the year, you will be able to see better results come through. [Foreign language] Just to clarify the second point that you've mentioned, in my answer, I did say that the capital plan will be, you know, applied based upon the FY 2024 results. But that, and I think that's where the confusion lies. You might have thought that that means that we will start to apply it from March of next year. That wasn't my intention. Basically, the dividend will be dependent upon this year's earnings results. And if you do a reverse calculation, what that means is that the dividend, the way we're going to do a return, is going to be based upon or is going to be decided within this year, and we will be able to open and share with you as to what that approach is going to look like. And in the previous call, I did say that we would be able to share with you more color in the first half of this year. And if you think about the first half earnings release, that happens in the month of August. So it will be after that point in time, we will be able to confirm the way in which we do shareholder return, and we'll be able to open that approach to you. So, I hope there is no misunderstanding. [Foreign language] Lastly, on investment gain that you've asked. So in the first quarter, the investment gain has increased about KRW 86 billion, and most of it is because of the interest and dividend income. [Foreign language] I understand that what you are asking is the impact that we're seeing on FVPL, the expansion of it, due to the changes in the accounting standards, and you are probably wondering about the valuation amount that hinges on the changes in the overall market. [Foreign language] So if you go to page eight, you see the valuation gains from FVPL assets, and that is broken down into equities, bonds, and also alternative investment, in the amount of about KRW 50.6 billion. [Foreign langauge] So for the equities, in Q1, the impact or the increase is because of the rise in the equity prices in domestic and overseas stock market. Bond, it says it's valuation gain, but these products are mostly like money market funds and short-term cash-based funds. So although they are captured under PNL categorization, they are in the form of more like an interest income. [Foreign language] Now for the alternative investment in the amount of KRW 50.6 billion, these are the FVPL portfolios, which incorporate corporate financing fund and PEF fund, and most of it are broken down into equity securities and debt securities. [Foreign language] For the equity type securities fund, it was impacted by the changes in the asset value of the underlying assets and also the changes in the overseas interest rate environment. [Foreign language] Aside from such valuation gains that we have recognized in Q1, there was no other, you know, big or significant one-off factors. [Foreign language] Thank you. Next question, please. [Foreign language] The following question will be presented by Jae-woong Won from HSBC Securities. Please go ahead with your question. [Foreign language] Thank you very much for the good results, despite a difficult and challenging operational backdrop. I just have one question. I see that your New Business, CSM, is quite good, and you've mentioned that the share of your GA channel has gone up. Would like to know as to the extent of the GA channel contribution to your New Business, and also what is your target? [Foreign language] Yes, first off, the New Business, CSM, accounts for about 30% of the total, as of Q1 of 2024. It had expanded to that level. [Foreign language] And if you compare this to last year's share as against the last year's revenue, this is about 10% of the GA sales, the entire pie. [Foreign language] Within the GA market, we've been able to bolster the competitiveness of our product portfolio, and we have strengthened our market positioning. We think that we will be able to maintain, at minimum, the current level. [Foreign language] Thank you. Next question, please. [Foreign language] The following question will be presented by Hee-yeon Lim from Shinhan Investment & Securities. Please go ahead with your question. [Foreign language] So thank you very much for good results this quarter. I just have two quick questions. First is, you've mentioned that you are planning on sustaining the CSM multiple at around 15x. If you just do a simple calculation, that means then on a quarterly basis, you have to have about KRW 18 billion of New Business come through. In Q1, I believe that was possible because there were quite, I guess, popular products in terms of the premier class, hospital rooms, as well as daily allowances related products that were sold quite well. But in Q2 and Q3, would you be able to do this monthly average of New Business in the amount of KRW 18 billion? If you think that this is possible, what are some of the new product lineups that you're currently thinking about and the business treaties or riders that you are currently planning to incorporate? Second question is on your capital ratio. Right now, the company has reported a capital ratio of above 207%. But if you look at page 11, basically, you're saying that what is above 220%, the excess capital will be used for shareholder return or domestic or expanding your overseas business. But I would think that it would not be possible for the company to immediately implement and use this 50 percentage points of capital ratio immediately for shareholder return. So just to gain some color as to the future, you know, horizon regarding how you're going to do the shareholder return, I think it'll be helpful if the company can give us some guideline in terms of the timeline, I think. And then if you give us that information, I think it will be helpful for us to understand the intensity of the capital policy or the strength of that capital policy that we can expect from the company. And third is not a question, but a request. Very, you know, grateful that you're having this very, you know, earnings call every quarter, quite progressive. But we'd like to ask that you conduct this not through a consecutive translation, but through a simultaneous interpretation in order for us to have a much more, you know, higher quality Q&A session. Because obviously there's going to be a lot of redundant questions, and I think it'll be helpful if we conduct this session through a simultaneous interpretation and not through consecutive. And I think that will be for the benefit of the investors and analysts. [Foreign language] Thank you. Responding to your first question, you are right. In the first quarter, there were certain market issues that drove the expansion of the market and the products. And yes, we are also making full preparation for new product lineup for the second and the third quarter as well. And leveraging the infrastructure gap that we enjoy, we believe that we will be able to sustain the market share at the level that we are currently at. And as I said before, we will also, in parallel, focus and control on the margin side, the profitability, profitability aspect, by a stringent control of our portfolio as well as through efficiency management. So through the improvements and the profitability side, our plan is to lessen the over, I guess, overburden. We want to make sure that we lessen the overburden on the top line revenue. [Foreign language] Responding to your second question, our internal direction, yes, we've actually said three-year as a timeline, duration, time horizon for us as we continuously and gradually expand on the shareholder return ratio. And every year this is going to be rolled over. In light of the requirement for in-house investment that the company also has, we will be able to expand and within that three-year timeline and go towards that objective of 50%. [Foreign language] Thank you very much for your questions and your request. We will internally consider it and come back to you. [Foreign language] The following question will be presented by Hee-won Choi from Morgan Stanley. Please go ahead with your question. [Foreign language] [Foreign language] [Foreign language] [Foreign language] [Foreign language] Yes, thank you for taking my question and thank you for your results. If you look at the first quarter numbers, the experience variance on a year-over-year basis was quite good. Is this an impact from your repricing of medical indemnities? And also as we go towards Q2, three and four, what are your outlook and forecast regarding the claims experience variance? Second question is, this will hinge on your capital management plan as well. But with regards to the government's value-up program, are there any preparations that's taking place inside the company? And if so, what are some of the factors that you are at this point mindful of to include in your plan? And then if you look at page 11, your target for shareholder return rate is 50% going forward. Right now, it's around 37.4%. Does this include the dividend that you dividend from the preferred shares as well? And also, would this preferred share related dividend be included in your future target? And are there any other factors that you are considering to include within the 50%? [Foreign language] Responding to a question on claims experience variance. Under the IFRS standards, we think that the level that we see in Q1 is most likely going to continue into the, you know, towards the end of the year. But for Q4, usually this is a season where we see a slight increase in the overall claims paid, so that could have some downward impact on the experience variance. But on a per annum basis, I think the level will be similar to what we see in Q1. [Foreign language] Now, on second question, the government has announced its second guideline on its Value-up Program. The key, gist of it is that including the accountability of the BOD, the companies will be left at the voluntary disclosure for each of the items that's listed. We will wait until the finalized version, the government program is announced, and of course, we will also actively respond and cater to the requirement of voluntary disclosure. And the last point, yes, our shareholder return rate does include the dividend from the preferred shares. [Foreign language] Thank you. Next question, please. [Foreign language] The following question will be presented by Yong-jin Seol from SK Securities. Please go ahead with your question. [Foreign language] Thank you for taking my question. One follow-up question on your capital management plan is that I see that in terms of your K-ICS Ratio, you do have quite a bit of buffer, but in light of the speed at which your surrender reserve is being accumulated, I think there is some constraint regarding the net addition of the distributable profit. So has that element been considered when you came up with a 50% target? [Foreign language] Now, the surrender reserve issue is not really meaningful for SFMI. I say that because as of end of last year, even accounting for that reserve, surrender reserve, the distributable income or profit from SFMI is even above already above KRW 5 trillion. So this is not going to have any significant impact on our mid to longer term plan. [Foreign language] Since there are no more questions in the queue, we would like to now close the Q&A session. If you have any unanswered questions, please, do contact us at the IR team. Thank you. [Foreign language] Well, and this brings us to the end of SFMI's earnings presentation for Q1 of 2024. Thank you everyone for joining us.