Good day, everyone. Thank you all for joining this conference call. Now we'll begin the fiscal year 2022 first quarter earnings call by Samsung Life Insurance. This conference will start with a short brief by Head of Finance and Accounting, followed by a Q&A session. If you have a question, please press star one, that is star and one on your phone during the Q&A. For cancellation, please press star two, that is star and two on your phone. Now we shall commence the conference by Samsung Life Insurance. Yes, good morning. This is In Hwan Kim. I'm the Head of the Finance Team at Samsung Life. I'd like to first thank you for taking the time out of your busy schedules to join us at the conference call for first quarter 2022 for Samsung Life. As we informed you in advance, today's conference call will mostly proceed in the form of a Q&A with members of management. Please refer to the handout materials, and I will touch on the key highlights for the first quarter before moving on to Q&A. Starting early this year, difficult business conditions persisted with growing global market volatility at home and abroad. We had a spike in Omicron confirmed cases, and benchmark rate increases by central banks around the world. Protraction of the Russia-Ukraine crisis also weighed on the environment. However, we continue to perform well with improvements across our major management indicators, including new business sales, in force book and asset management as well. We recorded a significant increase in value of new business, and also, value of in force as well, which are the source of future profit. Our consolidated net profit attributable to shareholders recorded KRW 270 billion, due to a decrease in investment profit from increase in variable guarantee P&L loss. For insurance profit, we recorded KRW 356 billion, which is actually the highest level since the first quarter of last year, and sources of recurring investment profit actually were also strong as well, including disposal gains, dividends, consolidated income from affiliates. Our RBC as of the end of March 2022 did decline to 246 due to a decline in valuation gains on bonds amid a rising interest rate environment. However, our K-ICS ratio, which is calculated based on fair market valuation of our liability, actually saw a year-on-year improvement based on our projections. This signifies that we are likely to see our capital adequacy re-reinforced and even become even more solid ahead of the new solvency scheme. As a representative life insurance company of Korea, we seek to lead a new phase of growth in the insurance industry. We are taking care of our customers life cycle needs, including good health, retirement planning, and asset management as well as we seek to contribute to building a strong underlying safety net as we approach a super aged society. Last April, we were the first in the industry to launch a health promotional product that is based on an app and linkable to our smartwatch. This was the first initiative of its kind. To address the quickly evolving digital financial environment, even better, we launched the integrated service platform called Monimo, together with our financial affiliates within the Samsung Group. Based on a customer data analysis, we continue to develop innovative products and service offerings to increase our lineup that can contribute to differentiated financial services for our users. Yes, please refer to the results handout for the details on our results. Please be reminded that the earnings outlook contained in today's conference call are subject to change depending on both domestic and overseas market conditions and operating environment. Now then, we will move on to Q&A session with members of management. Q&A session will begin. Please press star one, 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 Sinyoung Park from Goldman Sachs. Please go ahead with your question. Yes. This is Sinyoung Park from Goldman Sachs. I have two questions. It seems that some of your competitors have actually shared details on the expected size of their CSM, also the amortization rate that is expected to be applied. If you could provide those types of details, I'd appreciate it. Regarding the investment spread or interest spread, according to the fact book, it seems that there was a slight increase in the reserve interest rate. What was the reason behind that, and what is your outlook for this year? Yes. This is Head of the Actuarial Team. Let me take your first question on our expected CSM size upon conversion to IFRS 17. For your information, we are still in the process of settlement, so these are not confirmed final numbers. Please just look at them as reference only. At the moment we are looking at one-year retrospective approach, which would bring expected CSM to around KRW 8 trillion at the time of conversion. That would break down to KRW 5 trillion for contracts prior to 2020, and KRW 3 trillion for 2021 and 2022. Then I think the second part of your question was regarding dividend policy. Although, things have not yet been finalized, the transition to IFRS 17, I mean, still we do recognize the need to adopt some change to our shareholder return policy. However, because parts of the IFRS 17 and K-ICS scheme, which will be introduced going forward, have not yet been finalized, we do intend to start reviewing what kind of changes would be best for our dividend policy starting in the second quarter. Hopefully once it is crystallized, we hope to get back to you before the end of the year. RM 팀장 구상입니다. 이원차 마진 전망에 대해서 답변드리도록 하겠습니다. Yes. I'm head of the RM team. Let me share with you our company outlook in terms of the interest spread. 지금 보유 이율은 거의 상환되는 금리와 신규로 들어가는 금리가 거의 이제 일치되는 수준 근처까지 와 있고요. 그래서 이제 보유 이율은 최저점에 와 있다라고 생각하시면 될 것 같고요. In terms of our yield or carrying yield, I think it's fair to say that it's nearing its lowest point, because we're seeing near convergence, the yield upon maturity and the new money yield approaching a state of equilibrium. 그 부담 비율은 저희 공시율 상품들이 금리가 올라가기 때문에 자산이익률보다는 좀 빠르게 금리가 공시율이 올라가는 부분들이 있어서 이번 분기에는 이제 공시율 인상으로 인해서 약 300bp 정도 부담률이 올라간 부분들이 나와 있습니다. 그래서 이번 차 마진이 약 30bp 정도 악화된 것으로 숫자는 나와 있습니다. For this quarter, you will notice that our interest spread margin actually has widened by three basis points. This is because our reserve interest rate actually has gone up by about three basis points as there was an increase in our crediting rate, following the increase in market interest rates. The crediting rate on these products actually increased faster than the market rate, which had the effect of pushing up our reserve interest rate. 향후에는 상황 금리는 계속 낮아지고 반면에 신규 투자 금리는 계속 올라가는 구조다 보니까 연말 정도가 되면 이원차 마진은 전년 수준으로 회복을 할 것 같고요. 내년부터는 그 회복되는 속도가 지금보다는 훨씬 빠르게 나타날 것으로 예상이 됩니다. 이상입니다. Going forward, we expect the interest spread margin to continue to recover as the yield upon maturity continues to go down, whereas new money yield continues to climb. We think that we will be back close to prior year levels by the end of this year. Starting next year, the pace of recovery for our interest spread will become faster. 네, Sinyoung Park 사모님 충분한 답변이 되셨습니까? 저 하나만 더 여쭤보면, 아까 전에 전환 시점 CSM 규모에 대해서 언급을 해주셨는데, 신계약으로 인해서 얹어지는 CSM 규모는 어느 정도로 추정하고 계신지 여쭤봐도 될까요? I had a follow-up question. You gave us an estimate of the size of CSM upon conversion to IFRS 17. Just to clarify, how much is the incremental CSM on top of new business APE? 계리 팀장 변인철이 답변드리겠습니다. 질문 주신 일 년 신계약 CSM 규모에 대해서 질문하신 것 같은데요. 현재는 저희가 보장성 포트폴리오를 많이 판매를 하고 있기 때문에 대략적으로 한 3조에서 3조 5천 사이 정도로 예상을 하고 있습니다. Yes. I'm the head of the actuarial team again. I think you're asking about the projected size of CSM for one year new business. Because we do sell still a high proportion of protection products in our portfolio. Right now the estimate is between KRW 3 trillion-KRW 3.5 trillion. 다만 아직 이전에 말씀드린 것처럼 일부 제도하고 그다음에 적용되는 가정들에 대해서 최종 확정되지 않은 상황이기 때문에 일부 변동이 있을 수 있다라는 점을 말씀드립니다. 이상입니다. As we mentioned before, there may be certain change because some parts of the institutional scheme, also some of the underlying assumptions, have not yet been finalized. 네, 박 사모님 추가 질문 있으십니까? 네, 없으면 다음 질문으로 진행하겠습니다. 다음으로 질문해 주실 분은 신한금융투자의 임희연 님입니다. The following question will be presented by Hee Yeon Lim from Shinhan Financial Investment. Please go ahead with your question. 질문 기회 주셔서 감사합니다. 앞서 CSM 관련해서 많이 말씀해 주셨는데, 저희가 그러면 지금 2021년도까지 한 8조 원 정도의 CSM 플러스 2022년도 신계약 약 3에서 3.5조 원 더해서 한 11에서 12조 원 사이의 CSM을 올 연말에 이제 그 IFRS 17 적용 시점에서 보면 되는 숫자인지. 물론 이제 변경 가능한 부분도 있겠지만 일단 기준선을 한 11에서 12조 원 사이로 보면 될지 한번 확인 좀 부탁드리고요. 그리고 지금 말씀하신 이 일년 소급 계획 상에서 저희 자본 규모는 선인 대비해서 어느 정도 변동이 있을지 궁금합니다. 그리고 두 번째로 궁금한 부분은 이제 이차 역마진 관련된 부분인데요. 지금 내년부터 이제 부담 이유를 저희가 3.1% 수준으로 적용을 하면서 2차 역마진이 좀 이제 해소가 되는 것으로 지금 커뮤니케이션이 되고 있는데 사실상 그렇다고 해서 이게 과거 고금리 계약들이 사라지는 게 아니기 때문에 어쨌든 저희가 이 금리에 대한 변동성은 계속 가져가야 되는 부분이지 않을까 생각은 듭니다. 향후에 이 2차 영마진 계약들에 대해서는 앞으로 저희가 재무제표상에서 어떻게 접근을 해야 되는지, 그리고 그 금리 환경 변화에 따라서 향후에 다시 2차 영마진이 발생할 수 있는 여지가 있는지 궁금합니다. Yes. Just to clarify, earlier you mentioned the expected CSM size totaling KRW 8 trillion, + KRW 3-3.5 trillion for 2022 new contracts, which add up to somewhere between KRW 11 trillion-KRW 12 trillion. Is that a fair understanding to say that the expected total CSM in aggregate would be somewhere around that range? And you also regarding the negative margin, you said starting next year as the reserve interest rate goes down to 3.1%, you should see narrowing or resolution of the negative spread margin issue. However, because fixed rate contracts will remain on your books, they do not all roll off. Will you continue to be exposed to interest rate volatility on the market? Depending on interest rate movement, is it possible that even if the negative margin is narrowed at one point it could widen back again? Is that possible? 네, 계리 팀장님이 대신 답변드리겠습니다. 먼저 첫 번째 질문 주신 그 2023년 1월 1일 기준의 CSM을 질문하신 것 같은데요. 이게 전환 시점에 CSM 8조에 그 1년 22년 신계약 CSM 뭐 3에서 3.5조를 그냥 더하시면 안 되고요. 22년 말이 되게 되면 그 1년 동안의 어떤 가정이라든지 보유계약 변동, 그다음 CSM 상각 등을 고려해 보면 약 10조에서 10.5조 사이에서 출발할 걸로 전망되고 있습니다. Yeah. I think the timing that you are asking is January 1st, 2023. Is that total number what we expect for CSM as of January 1st, 2023? Well, to clarify, it's not just a matter of simply adding the two components, KRW 8 trillion at time of conversion, plus another KRW 3 trillion-KRW 3.5 trillion for the 2022 new contracts. We have to be mindful that at the end of 2022, there could be certain changes due to changing assumptions, change in our in force book, also CSM amortization as well. Likely we may be beginning 2023 with CSM around KRW 10 trillion-KRW 10.5 trillion. 자본 감소 규모에 대해서 질문을 주셨는데요. 이 부분에 대해서는 사실 현재 지금 부채 기표하고 있는 계약자 지분 조정 등이 자본계정으로 움직임에 따라서 사실 그 자본은 좀 소폭, 전년 대비 좀 소폭 증가해서 가는 걸로 비춰질 것 같습니다. You asked about the likely impact on our equity, whether we expect our equity to go down. Actually, the policyholder equity adjustment portion will not be classified as liability, but it will be classified under capital. In fact, our capital is expected to increase slightly. 예, RM 팀장입니다. 그 영마진 부분 관련해서 답변드리도록 하겠습니다. Yes, this is Head of RM. Let me talk more about the negative margin. IFRS가 시행되고 나면 저희 보유계약에 대한 부담 비율이 3.1% 정도 된다라는 말씀을 많이 드렸는데요. 이 3.1%의 의미는 저희가 가지고 있는 부담 금리가 높은 계약들의 미래 영마진과 또 저희가 가지고 있는 향후 이익이 예상되는 계약들의 미래 이익을 평균해서 합쳐서 보면 저희가 3.1% 정도 된다라고 말씀을 드리는 거기 때문에, 실제 질문하신 것처럼 과거 고금리 보유 계약 자체가 없어진다, 이런 부분들은 아닌 건 맞습니다. We communicated with you earlier that we expect reserve interest rate on our in-force contracts to be somewhere around 3.1%, with adoption of IFRS 17. When we say 3.1%, the meaning is as an average. The expected negative margin on the high fixed rate legacy contracts that remain on our books, plus the future profits that we expect on profitable contracts. Between the two sides, the aggregate average interest that we are projecting is 3.1%. To clarify, your comment is right. It is true that the high rate legacy contracts will not be entirely rolling off of our book. That's true. 따라서 향후 금리가 다시 많이 하락을 해서 회사의 자산 이익률이 하락한다고 보면, 그런 걸 가정해 보면 영마진 감소, 영마진 발생도 가능한 구조는 맞습니다. Hypothetically, if there is a significant drop in interest rates and the investment yield goes down significantly, then potentially there could be reverting back to negative margin conceivably? However, if you look at the composition of our book, we have already transitioned significantly away from fixed rate products, mostly towards floating rate products. Through effort on our part, we have significantly narrowed the duration gap. Even if there is a drop in interest rates going forward, we do not in any way expect an increase in negative margins like what we saw in previous times. Actually, just with our interest-bearing assets alone, we expect that after conversion to IFRS 17, our interest spread will, the gap will narrow down to 10 basis points. Even that minus 10 BP can be managed or offset by our investment yield on capital type assets as well. We see the likelihood of negative market margin becoming an issue to be very low. However, to address any potential issues regarding negative margins that may arise after adoption of IFRS 17, we have been making effort preemptively. For example, removal of the general accounts is one. We will again, in no way be exposed to large swings as before, from impact or owing to impact from negative margins. Just a quick follow-up. I think you mentioned CSM amortization rate expected at about 10%, which does seem a little bit high. Could you explain? I think it was at a previous IR session that we did mention 10% amortization for CSM. That was just to give you an overall indication for the entire company. For in-force contracts prior to 2020, the CSM amortization rate will be lower than 10%. We believe it will be around 8%-9%. For the health related policies that we have sold in more recent years, they tend to have shorter maturity and contract periods, which will mean CSM amortization will be higher than 10%. On balance, that's why we indicated overall for the company, we're thinking of around 10%, but again, it's inclusive of the entire company. JP Morgan, Myung-Ook Kim. The following question will be presented by Myung-Ook Kim from JP Morgan. Please go ahead with your question. 두 가지 여쭤보려고 하는데요. 첫 번째는 배포해 주신 프레젠테이션 삼 페이지를 보면 보유계약 가치가 한 삼개월 동안 8.6조에서 16조로 굉장히 많이 증가를 한 것 같습니다. 근데 해당 기간 동안 신계약 가치의 증가는 그렇게 크지가 않아서 이 보유계약 가치의 증대에 대한 무브먼트에 대해서 말씀해 주시면 감사드리겠습니다. 특별히 이 부분을 경제적 과정과 오퍼레이셔널 쪽에서의 과정을 나눠서 말씀해 주시면 도움이 많이 될 것 같습니다. 두 번째 여쭤보고 싶은 부분은 회사의 분기 순이익의 변동성이 사실상 변액보험 관련 준비금 때문에 굉장히 많이 커지고 있다라는 느낌을 받습니다. 향후에 그 변동성을 줄이려는 회사의 어떤 솔루션이 있으신지요. GMAB 관련된 회사의 솔루션에 대해서 좀 구체적으로 말씀해 주시면 감사드리겠고요. IFRS 17 하에서 이 변액보증준비금 비즈니스를 가지고 있는 부분이 순이익에 대한 변동성을 향후에 더 키울 수 있는지, 아니면 더 줄일 수 있는지에 대한 부분을 좀 말씀해 주시면 감사드리겠습니다. 사실상 배당을 수정하기가 굉장히 어려워서 여쭤보는 부분이고요. 혹시 다른 보험사들처럼 이 부분에 대한 비즈니스에 대해서 전략적으로 매각이나 이런 부분도 검토하실 수 있는지 말씀해 주시면 감사드리겠습니다. Yes, I have two questions. On page four of the distributed materials, on the bottom it seems that the value in force actually has gone up significantly just in three months, moving from KRW 8.6 trillion to KRW 16 trillion, whereas in the same time period, value of new business did not increase by that big a margin. Could you explain the movement in VIF, breaking it down into economic assumptions and operating assumptions as well? Second, it seems to me that perhaps it's because of your variable guarantee reserves and reserve requirements that is leading to greater volatility in terms of your quarterly earnings. Do you have any particular solution in mind at the company level to somehow reduce that kind of volatility regarding your GMAB exposure? Under IFRS 17, what do you think the impact on the variable guarantee reserves will be, in terms of your earnings visibility? Will it likely contribute to bigger swings or will it be the other way around? I ask because it's hard to project how much dividends are likely to be available. Other companies actually have been examining different strategies, choosing to dispose of, for example, their variable guarantee related business, for example. Is that something an option that you are open to reviewing as well? 대리팀장 변인철입니다. 먼저 질문 주신 세 가지 중에 첫 번째, 당사 보유계약 가치 증가된 부분에 대해서 경제적 관점에서 좀 설명을 드리겠습니다. Yes. This is the head of the actuarial team. Let me take your first question, explain the reasons behind the increase in value in force from an economic assumptions point of view. 결론부터 말씀을 드리면, 1분기 동안에 시장에 금리가 많이 올라서 저희가 적용하는 자산이익률 과정이 2021년 말 대비 한 64BP 상승한 데 기인한다고 보시면 될 것 같습니다. In the first quarter this year, there was a significant increase in market interest rates. As a consequence, the NIER assumption that we applied actually increased by 64 basis points compared to the NIER applied at the end of last year. 분기 두 번째 질문에 그 다른 과정들에 대해서 질문을 주셨는데요. 저희가 분기에 그 보유계약 가치를 산출할 때는 그 다른 계리적 과정은 조정하지 않고 앞서 말씀드린 그 자산이익률, 즉 경제적 과정만 조정하기 때문에 그 작년 말하고 달라진 점이 없다고 이해하시면 될 것 같습니다. You asked about any other operating assumption changes. As a matter of fact, when we calculate quarterly value in force, we only apply adjustments to the actuarial assumptions only. Or excuse me, the economic assumptions only. That would be the NIER. We do not adjust any other actuarial assumptions. 다음에 참고로 신계약 가치 부분은 APE는 좀 일부 떨어졌지만 저희 마진율이 올라간 부분에 대해서 설명드리겠습니다. Let me elaborate further. In terms of new business, there was a partial decrease in APE, however, margins went up. Let me explain. 저희가 1분기에 일부 종신보험의 담보장이라든지 이런 부분들을 좀 강화해서 출시를 했고요. 이 부분에 대한 수익성이 작년 대비 한 10~15% 상승한 데 기인해서, APE 물량은 소폭 감소했지만, 마진이 높은 상품 판매에 기인해서 신계약 마진이 51%에서 65%로 올라갔다고 이해해 주시면 될 것 같습니다. In the first quarter, we did introduce new protection type products providing stronger cancer protection, for example. These would be whole life type protection products which have greater margins. This had the effect of boosting overall profitability by about 10%-15% versus last year. Although in terms of AP volume, there was a slight decrease because we boosted sales of these higher-margin products, the new business margins actually went up from 51%-65%. Yes. This is the head of the RM team. Let me take your question about the volatility induced by variable guarantee reserves. Right now, regarding our variable guarantee P&L, we do apply a two-tier differentiated accounting system, where we treat the hedged portion differently with the non-hedged portion. 60% we apply hedged or hedging accounting versus 40% non-hedged. For the hedged accounting treatment, certain movements in interest rates or share prices do not have a big impact on the earnings. However, it is only in situations where there is an abrupt movement in interest rates or share prices that there might be a gap versus hedged, which would be the case where we would have a slight impact on our earnings. For the non-hedged portion, it is calculated based on a set of assumptions provided by the FSS, the financial authorities, which are changed only one time a year. Although we are exposed to interest rate or share price movements, there is a difference again between the hedged and non-hedged portion. Early in the year, there would be no big difference between the two sides, but it's only in November or, excuse me, September, when the FSS determines its assumptions that there might be a big difference in terms of the impact to earnings, again from the hedged versus non-hedged portion. In the case where there is a dramatic or abrupt change in their interest rates or share prices, then both the hedged and non-hedged portions would see a big impact to earnings. Right now the current circumstances are consistent with that kind of scenario. In terms of the level of hedging, the current level has been calibrated so that we can achieve 100% hedged upon conversion to IFRS 17. After transition, certain changes to interest rates or share prices, we believe will have almost no impact on the earnings. In the event, of course, that there is an unexpected dramatic swing in interest rates or share prices after IFRS 17 is introduced because of the hedged margin of error that I mentioned, there could be the potential of certain impact to the P&L. However, the discount rates variation will be much reduced. Any volatility that we do see in our earnings will be greatly scaled down, perhaps to less than one-third of current levels. From your answer, it seems that the biggest driver of the increase in value in force was due to the interest rates. Given how the risk-free rate actually has increased, perhaps it's time to adjust your discount or your risk discount rate as well. Have you applied an adjustment already? Or if not, any reasons why? This is the Head of the Actuarial Team. As mentioned recently, because of the increase in interest rates, we saw an improvement in our investment yield, which led to improvement in value in force. At present, we have not applied any adjustment to our discount rate yet, but if the rate continues to climb, we intend to examine a possible adjustment, perhaps on a half-yearly or half-year basis, or excuse me, at the mid part of the year perhaps, or the end of the year perhaps. The following question will be presented by Yafei Tian from Citigroup. Please go ahead with your question. Hi, I have a few relatively simple questions and a follow-up from earlier. The first one is on the variable guarantee option for this quarter. The impact is relatively sizable. Will you be able to give us a little bit more granular breakdown? How much of that came from interest rate and how much is from equity market movement? And do you mind reminding us again the sensitivity for interest rate and equity for that variable guarantee option book? That's the first one. Then the second one is that you know, with South Korea economy opening up, can you give us some color on your trajectory of the risk loss ratio going forward? Finally, just to you know, double check if I heard you correctly on the capital comments with IFRS 17 implementation, do we expect the overall solvency ratio to be largely similar to the current level? Thank you. Sorry, the audio feed was not very clear. May I clarify if I understood the questions properly? The first question is impact from variable guarantee options divided into interest rate versus equity price movement. Was that the first question? Correct. Yes. Correct. The second question, loss, expected loss. Yes. Expected loss ratio from economic opening. Yes. What was the third question? Capital? Yeah. The solvency ratio on the IFRS 17, is it gonna be similar to current level? Oh, okay. Thank you very much. Yes. Let me take the first question, try to break down the drivers between interest rate versus share price movement. 1분기 변액보증 손익은 약 1,700억으로, 이렇게 손실이 발생한 주요인은 시금리 상승에 따른 펀드 적립의 감소, 그다음에 주가 하락에 따른 역시 펀드 적립의 감소에 기인하고 있습니다. In terms of the first quarter, the variable guarantee loss was KRW 170 billion due to rising interest rates and falling share prices, which both had the result of a reduction in valuation gains on our bond holdings. 금리가 한 85bp 올라서 저희가 한 400억 정도 손실이 발생을 했고요. 주가는 한 220, 250포인트 정도 하락함에 따라서 약 700억 정도 펀드 적립의 감소에 따라 1분기 변액보증 손익이 좀 많이 발생했다라고 생각하시면 될 것 같습니다. 이상입니다. In terms of the contributing factors to the loss, there was an 85 basis points increase in interest rates that was responsible for about KRW 40 billion of the loss. The share price was down by about 250 basis points, leading to loss of about KRW 70 billion. It's a combined effect of those two factors that led to first quarter variable guarantee loss. 네, RM팀장 고상희입니다. 그 손해율 관련해서 답변드리겠습니다. Yes, this is the head of the RM team. Let me take your question on the loss rates. 금년 1분기 손해율은 전년 대비 소폭 개선된 것으로 일단 숫자는 나왔습니다. First, if you look at the loss rate number for first quarter this year, it does show slight improvement versus the prior year. 저희가 판단할 때는 금년 1분기 손해율에는 아직도 코로나 확산으로 인한 의료 이용량 감소 영향이 일부 포함돼 있다라고 보고 있고, 요거 그 코로나 영향으로 인해서 손해율이 많이 좀 개선이 됐는데 최근에 백내장 이슈나 이런 부분들로 인해서 그 개선 폭이 조금 갉아먹으면서 실제 소폭 개선된 것으로 숫자는 나와 있는 것으로 판단합니다. Actually, we think that the loss rate that we saw in the first quarter does in part still reflect the effect of reduced use of medical services due to the spread of COVID-19. Obviously with COVID, we did see an improvement in loss rates. But recently, due to more people getting cataract surgery procedures, the improvement actually was a bit eroded. In the end, the improvement to our loss rate was, as you can see in the number, just at a slight level only. 사월 이후는 코로나 환자가 급격히 감소하면서 의료 이용량이 다시 늘어서 실제 저희 입장에서 보험금 지급이 일부 늘 것으로 예상은 하고 있지만, 반면에 사월 이후에 급격히 증가했던 백내장이 당국의 조치와 회사의 심사 강화 등으로 급격히 지금 감소했기 때문에 두 가지 보험금 지급 플러스 영향과 보험금 지급 마이너스 영향들이 좀 상쇄되면서 현 수준의 기조를 그대로 유지할 수 있지 않을까라고 예상을 하고 있습니다. After April, there was a significant reduction in COVID cases, and there was in turn an increase in the use of medical service. We do expect that claims paid will increase. However, this will largely be offset after April, we believe because the financial authorities actually have been tightening restrictions on the cataract procedure. Also, we have been tightening our claims management process as well. We think that the impact of the cataract issue will be dramatically reduced. In terms of claim payments, there are both additive and deductive factors at play, which will largely be offsetting each other, and we expect the level to be similar to current levels. 다음으로 지급여력 비율 예상 부분에 대해서 답변을 드리도록 하겠습니다. Our expected capital adequacy. 지금 그 새로운 지급여력 제도인 K-ICS는 사실 내년부터 도입되는 것으로 예정이 돼 있는데 아직까지 제도가 충분히 확정되지 않은 상태고, 특히 IFRS에서 사용하는 장래 예상 캐시플로우를 K-ICS에서도 그대로 사용하기 때문에 아직 IFRS 결산이 마무리되지 않은 상태에서 내년도 K-ICS 비율을 정확히 어느 정도 수준이라고 말씀드리기는 사실 어려운 게 현실입니다. The new K-ICS scheme will be adopted, or go into effect next year, but still it has not been fully finalized and confirmed. It uses the same future expected cash flow approach as IFRS 17, and since we are still in the process of working on the IFRS 17 implementation, it's very difficult for us to say at this point what kind of K-ICS capital adequacy ratio we expect next year. It's hard to say at this point. However, our expectation is that barring a scenario where there is a dramatic fall in interest rates, otherwise we will be able to maintain a solid capital adequacy level at above 200%. Yafei, do you have any follow-up questions? Yeah. Just one on the variable guarantee option, just remind us what is the current sensitivity for that going forward from interest rates and equity market movements? Yes. I'm head of the actual team. In terms of the interest rate and also share price sensitivity for our variable guarantee options. For interest rates, for every ten basis point change in interest rates, the impact would be KRW 10 billion. For share price, a change of 100 points would be equal to KRW 60 billion-KRW 70 billion sensitivities. The following question will be presented by Byung-gun Lee from DB Financial Investment. Please go ahead with your question. Yes. This is Byung-Won Lee from DB Financial Investment. I also have two questions. The first question is mostly requiring some fact checking. I understand that toward the end of March, I believe the FSS did provide an illustrative indication of the discount rate that could be applied under IFRS 17. Based on that discount rate, the policy reserves that can be calculated compared to your current surrender value reserve, is it any greater or smaller? If you could compare the size, I would appreciate it. Under IFRS 17, what kind of KPIs do you intend to track and manage in terms of profitability? The market is mostly talking about the absolute size of the CSM, but I have serious questions about whether that would be an appropriate indicator or not, given risk amount also being subject to different volatility factors. Also, you use VONB under your EV calculations, but I question whether that would also be an appropriate measure for profitability because the assumptions are different versus K-ICS or IFRS 17, also the timing difference as well. What kind of key KPIs will you be tracking under IFRS 17? Yeah. I'm head of the actuarial team. The discount rate under IFRS 17 was actually confirmed and set at the interest rate as of the end of 2021. The increase in our reserves, based on that calculation, would be slightly above our current reserve level. Yes, this is the head of the support or business management support team. Let me take your question on the KPIs. Rather than speaking specifically about just the profitability measures, let me explain overall our KPI management approach. Under the new scheme, the approach to writing up the financial statements will be changed in terms of sales, earnings, also capital. We believe that tracking the different metrics should require another different approach as well. Let me explain how we will be managing across the different components, sales, earnings, assets, et cetera. Starting with profitability, because I think that was what you were most interested in. In terms of new product development and launches, well, previously we applied EEV-based profitability hurdles. Going forward, we will be comparing that versus the accounting CSM or assumption based CSM amount and perhaps applying them both together in the second half of the year, to just for comparison purposes, as we intend to focus more on future profits going forward. Previously, we managed the profits depending on the different buckets. Going forward, we will be managing by CSM also the difference between the expected assumptions versus actual cash flow. In terms of the operating efficiency, we will not be looking just to manage the performance of that given period only, but we will be tracking a broad set of efficiency measures, including persistency rate, retention rate for the FCs, other productivity measures as well. Yes. In terms of assets, ahead of adoption of both IFRS 17 and K-ICS, we will be focusing our efforts on capital and asset soundness as well. ALM management will be very important in terms of fair market valuation of liabilities. That will also be measured as our key KPI as well. The work to incorporate these into our business plan will start in August this year. 제가 여쭤본 핵심은 이겁니다. 은행들도 기본적으로 바젤 기준에 자본 차지를 가지고 전체적인 회사의 리밋을 내려주는 방식을 취하고 있거든요. 근데 아까 말씀하신 거에 따르면 EV의 VONB에 대해서는 뭐 일정량이지만 리스크가 감안이 되어 있었는데, 방금 말씀하신 기준으로는 영업 현장이나 기타 채널에 대해서는 리스크량이 반영이 안 돼 있는 것처럼 보여서요. 그 부분을 어떻게 관리하실 계획인지 사실 이 부분이 제가 여쭤본 거의 핵심이었다, 이렇게 보시면 될 것 같아요. Just to clarify the previous answers. For the first question, is the timing as of the end of December? Is that correct? The key part of what I was asking regarding the KPIs was whether you intend to track and manage KPIs that factor in the total risk exposure amount because of VONB under EV, for example, I don't think incorporates that risk amount. That was the key point of my question. RM팀장 고상입니다. 답변드리겠습니다. 먼저 팩트 확인은 아까 계리팀장이 답변드린 거는 12월 말 기준이 맞습니다. 그리고 수익성 관리 부분에 대해서 답변드리도록 하겠습니다. Yes. I'm head of the RM team. To clarify the first question, or the answer by our head of the actual team. Yes, you're right, was as of the end of December. Regarding our profitability KPIs. 질문하신 것처럼 당사는 내년에 IFRS 제도가 들어오면 회계상 손익의 기준이 되는 CSM도 중요하기 때문에 CSM에 의한 관리 KPI도 운용을 하고, 반대로 지금 쓰고 있는 실제 계약의 가치를 이루는 EV 측면에서의 KPI 관리도 함께 병행할 예정입니다. Next year with adoption of IFRS 17, obviously we will be tracking CSM as a key KPI because it will form the underlying basis of our accounting profit and loss. However, in parallel, we will also continue to manage against the EV as a key measure of the actual value of our contracts. 다만 EV를 산출하는 방식은 지금의 IFRS 4 기준에 TEV 형태의 산출 방식이 아니라 실제 새로 들어오는 회계제도 IFRS 17 기준에 캐시플로우로 나오는 손익을 사용을 하고, 그리고 실제 자본 비용이라든지 리스크 차지도 K-ICS의 요구 자본 기준으로 리스크를 차지하는 것으로 다 변경한 새로운 MCEV에 가까운 EV를 가지고 해서 CSM과 더불어서 회사의 제반 평가 KPI로 사용할 예정입니다. Yes. However, the method of calculating this EV will be changed. We will not be adopting or applying the TEV method under IFRS 4, but the MCEV method that is more consistent with IFRS 17 and its cash flow-based method and approach. In terms of the cost of capital or risk charge, we will also be applying the level of required capital under K-ICS. Again, we will be managing both CSM and MCEV together in parallel. 지금 그래서 새로운 EV에 대해서 파일럿을 진행하고 있으며, 앞에서 지원팀장이 말씀하신 것처럼 내년도 경영계획 시에 이러한 새로운 EV에 대한 계획을 세워서 내년도 회사를 관리할 때 중요한 지표로 같이 끌고 갈 예정입니다. 이상입니다. Right now we're doing a pilot test of the new EV calculation. As the head of our management support team earlier said, we will be tracking the new EV measure to monitor and track our progress next year against our annual business plan. It will be a key quantitative measure that we use next year. 이것으로 질의응답 세션을 종료하겠습니다. Now we will end the Q&A session. 네, 이상으로 삼성생명 실적 발표회를 마치도록 하겠습니다. 추가적인 질문이 있으신 분들은 IR 파트로 연락주시면 상세히 답변드리도록 하겠습니다. 감사합니다. Yes, thank you very much. With that, we'll conclude the first quarter earnings call for Samsung Life. Please contact us at the IR team if you have any follow-up questions. Thank you.