Thank you for joining us today for Samsung Life's earnings conference call. If you would like to participate in the Q&A session, please press star and number one on your phone. Now we will start our Samsung Life's 2024 first half earnings conference call. Good morning, everyone. This is Minyoung Kim, Head of Investor Relations. Thank you for joining us today for Samsung Life's 2024 first half earnings presentation. Today's call is scheduled for 1 hour and 30 minutes, starting with the earnings presentation delivered by our CFO, Mr. Joo-Kyung Lee, and followed by your questions, which will be addressed by the members of our management team present here today. Please note that the figures in this presentation may be revised during the auditing process, and any forward-looking statements, including the earnings outlook contained in today's conference call, are subject to change depending on both domestic and overseas market conditions and operating environment. Let me now hand over the presentation to our CFO, Mr. Joo-Kyung Lee. Good morning, everyone. This is CFO, Mr. Joo-Kyung Lee. I would like to thank our investors and analysts for taking the time out of your busy schedules to attend today's earnings call. Let me start with our key business results for the first half of 2024. In the first half of 2024, our consolidated net profit recorded KRW 1,369 billion, having increased 40.5% year-on-year, backed by solid insurance service results and increased investment profit. Thanks to solid new business growth and company-wide efficiency management, we secured KRW 12.7 trillion worth of CSM, having increased by KRW 0.5 trillion year-to-date. With this growth trend carrying on to the second half, we expect our year-end CSM balance to exceed KRW 13 trillion. Furthermore, our health new business CSM showed robust growth of 60% year-on-year, while the proportion of health grew to 54%. This was possible by strengthening this product lineup to expand our dominance in the health market and by focusing on our sales channel and marketing. Next is our financial highlights. First is the current status of our consolidated balance sheet. Our total assets came in at KRW 320 trillion as of June, and is comprised of KRW 222 trillion in invested assets, KRW 28 trillion in variable accounts, KRW 29 trillion in corporate pension accounts, and KRW 41 trillion in Samsung Card and other consolidated subsidiaries. Total liabilities came in at KRW 278 trillion, with insurance liabilities recording KRW 197 trillion, including KRW 13 trillion accounted for CSM. Shareholders' equity recorded KRW 42 trillion. Next is the changes in shareholders' equity in more detail. Our shareholders' equity at the end of June came in at KRW 41.5 trillion, down KRW 2.8 trillion year-to-date. The decline was mainly due to the FSS liability discount rate strengthening, which had a negative impact. Accumulated other comprehensive income came in at KRW 23 trillion, consisting of KRW 8 trillion in insurance finance income and KRW 14 trillion in financial assets, including valuation gains from SEC shares and bond valuation loss. Next is the CSM movement. Our CSM balance at the end of June was KRW 12.7 trillion, which is a favorable result, with an increase of KRW 0.5 trillion year-to-date. As mentioned earlier, this is the result of quality new business focused on health insurance in the first half, generating KRW 1.6 trillion of new business CSM. It also reflects CSM adjustment and amortization of KRW 0.6 trillion and KRW 0.7 trillion, respectively. Going forward, we will increase our insurance profit by securing new business CSM more than that of the first half level, and by obtaining over KRW 13 trillion of CSM balance through improved efficiency and profitability measures. Now let me guide you through our consolidated net profit. Consolidated net profit for the first half grew by KRW 395 billion, year-on-year to KRW 1.4 trillion. On a quarterly basis, net profit recorded KRW 746 billion in the second quarter, which is up from the first quarter, KRW 622 billion, thanks to both insurance profit and investment profit exceeding management's plan. Insurance profit reported KRW 712 billion, while investment profit reported KRW 1.1 trillion in the first half. I will go over the quarterly specifics in the next slide. Insurance service results for the second quarter recorded KRW 444 billion, which was an all-time high since the adoption of the new accounting standard, IFRS 17. The strong earnings were led by an increase in CSM amortization from a year ago, while operating variance remained positive, owing to improved efficiency. We will do our best to secure robust insurance profits by increasing quality new business CSM and stringent efficiency management. Following is the breakdown of our investment profit. Investment profit in the second quarter reported KRW 555 billion, showing a significant increase year-on-year from -KRW 77 billion, which reflected one-off factors, such as loss from disposal of low-yielding bonds.... Even after we exclude the one-offs from last year, normalized investment profit improved by more than KRW 300 billion, thanks to decrease in interest expense on liabilities and robust profits from consolidated subsidiaries, mainly from Samsung Card and Securities. Dividend income from beneficiary certificates through asset diversification also helped. Despite the recent volatility in the financial market, we will continue to minimize any asset loss through stringent risk management in the second half, and plan to secure stable investment profit by continuously increasing the returns through selective investment centered on high-quality assets. Next, let me walk you through our business highlights and company strategy. In the first half, our new business CSM recorded KRW 1.6 trillion. We have been pursuing a products portfolio strategy to expand the sales of high-margin health products since the second half of last year. This resulted in the proportion of health products as our new business CSM to continue to rise and record 54%. In addition, we launched health products securing high surrender value in the first quarter to respond to market demands. As a result, the profitability indicator CSM rate decreased, but the monthly premium increased significantly, leading to continuous growth in health new business CSM. Going forward, we will continue to allocate more corporate resources to expand sales and generate more than KRW 3 trillion in new business CSM annually. Next is our distribution channel. Our exclusive channel plays a major role in securing quality new business, which generate excellent profitability and efficiency results compared to our other distribution channels. It accounts for 73% of our new business APE in the first half of this year. As of June, there are roughly 32,700 agents in our exclusive channel. Of such, the exclusive FC channel saw a net increase of 2,300 agents year to date, maintaining our industry-leading position. Next is our major efficiency trends. Protection persistency ratio, which is one of the most important metrics in managing CSM, improved to 92% in the 13th month, while staying similar at 68% for the 25th month. Loss ratio improved, driven by the living benefit segment, and recorded 75% in the second quarter. We believe this was partially driven by the slowdown in claims owing to the prolonging medical strike. Going forward, we will stably manage our annual loss ratio by expanding our risk premium, strengthen our underwriting, and by managing fraudulent claims. Next is on our asset management results. As of June, our invested assets recorded KRW 222 trillion, of which interest-bearing assets, such as bonds and loans, account for 65%. We were able to secure a stable dividend income from our equities assets as KRW 49 trillion, out of the KRW 51 trillion, account for stocks for affiliates. If you look at the graph on the right-hand side, investment yield for the first half recorded 3.3%. This result was achieved by, with not only improvements from the interest-bearing assets, such as bonds and loans, but also with the diversified assets, such as beneficiary certificate and equities, improving evenly. Next, I will talk about the details of our diversified assets and asset quality indicators. As of June, our diversified assets totaled KRW 34.8 trillion, which account for approximately 29% of our total invested assets. With concerns related to the domestic PF market and overseas real estate increasing in the first half, new investments have been delayed, and our overall diversified asset has decreased slightly year to date. However, going forward, we intend to maintain our trend in expanding our diversified assets by continuing selective investments centered on high-quality assets. Our delinquency ratio and NPL ratio recorded 0.25% and 0.21%, respectively, a bit elevated compared to the beginning of the year. Despite such, we still maintain one of the lowest level in the industry, and we will do our best to prevent further deterioration through risk management. Next is our K-ICS ratio. As of June, our K-ICS ratio is expected to be in the range of 200%-210%. Despite the increase in available capital, our K-ICS ratio is expected to be lower than 213%, as seen in March, due to the drop in interest rate and decline in liquidity premium on the back of strengthened discount rate guidelines. Please refer to the table on the right for details regarding our March K-ICS ratio. We will continue our efforts to manage the volatility in our K-ICS ratio and maintain adequate capital by reducing the duration gap through increasing ultra-long-term bonds and by ceding financial reinsurance. Lastly, I will go over the direction of our corporate value enhancement plan. As I mentioned during the earnings presentation this February, we are currently in the process of discussing the details plan, detailed plans regarding the corporate value-up program to meet market expectations. With the adoption of IFRS 17, our fundamentals have improved, and with that, we aim to enhance our shareholder return policy by targeting global top tiers payout of 50% in the mid to long term. We will comply with the disclosed guidelines by the FSC and come up with a detailed plan. We plan to expand our presence in the high-margin health market, improve our ROE based on recurring profit growth, and keep an upward trend in the shareholder return while maintaining adequate capital. We plan to actively participate in the program, and we'll communicate with the market as soon as we are done evaluating our plan. We are confident that the value-up program will be a good opportunity to show our competitive advantage and attractiveness as a dividend growth stock. This concludes our presentation on our first half 2024 earnings results. Thank you for attending today's earnings call, and we appreciate your continued interest and support for Samsung Life. 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 Hae-Jin Park from Daishin Securities. Please go ahead with your question. Yes, this is Hae-Jin Park from Daishin Securities. I have a question. It seems that you have seen a decline in terms of both margins and revenue. In the first quarter, I believe the reason was strengthening of refund type products. What was the reason for the decline in the second quarter? And what are your second half of the year plans in terms of margin management, and also how you intend to manage the aggregate CSM balance? Second question is, it seems that you have actually seen a significant negative CSM adjustment in the second quarter. So what is the reason for that? And third question is on your Value- up program. When would be the expected timing when a disclosure is likely to be filed? I do understand there are different outstanding issues currently pending, but just an idea of when you will be ready. Yes, I am head of CPC Planning. So let me briefly answer the first question on the reason for the decline in our top line and margins. So in terms of the margins on the products that we market and sell, relative to the first quarter, there was some deterioration in the financial environment in the second quarter with a decline in the interest rate. So year to date, we have seen a significant decline in the interest rate, and so not just for Samsung Life, but across the industry overall, there's been a 15%-20% decline in the yield. So that was a decline in margins, excuse me, not yield. But as the CFO mentioned in the presentation, the proportion of our health policies against the total actually has been increasing from 31% up to 42% and 54% in the second quarter. In terms of the aggregate CSM balance for health policies, it's also gone up from KRW 56 trillion up to KRW 89.4 trillion. And so as a result, we have seen a significant improvement in our CSM multiple for all products, which is 13.4x in the first quarter, it is now up to 15.2x. [Foreign language] In the first quarter, the CSM total balance was KRW 1.6 trillion. Although we have not filed disclosure yet, we do actually have the actual performance for CSM in July and August, which adds up to KRW 607.6 billion. [Foreign language] And so, our guidance in terms of total CSM was KRW 3.2 trillion. We believe that we are on good track to achieve at a minimum KRW 3.2 trillion, more likely KRW 3.3 trillion by the end of this year. [Foreign language] Yes, this is Head of the Actuarial Team. Let me take your second question regarding the CSM adjustments. [Foreing language] So in the first half, we saw about KRW 600 billion in total CSM adjustments for two reasons, which I'll explain. [Foreign language] So the first reason for adjustment to CSM, and this applies to any insurance company, is due to cancellation or termination of existing policies. So for us, this amounted to KRW 500 billion in adjustment. [Foreign language] And then the second reason, which is already known to the market, is the consequence of the regulatory authorities' measure to gradually lower the refund ratio. So the liquidity premium or LP has gone down quite significantly, which resulted in a CSM adjustment of about KRW 200 billion in our variable account portfolio. However, this should be recognized as a one-off factor, and so we believe that the adjustment will be less in the second half versus the first half of this year. [Foreign language] Yes, let me address your third question on the Value-up program. This is the CFO. [Foreign language] So, I know that you're very interested in when we will be ready to disclose our Corporate Value-up Program. In order to go ahead with the filing, we have to finalize our plan in terms of the company's underlying fundamentals, including our earnings and ROE, and also our company policies in terms of shareholder return. [Foreign language] So in terms of the fundamentals, we are seeking to achieve more than KRW 3 trillion in annual new business CSM, and we continue to see steady rise in our in-force CSM as well. [Foreign language] We are also seeing steady improvement in the yield on our invested assets. Also, have very stable earnings from our subsidiaries and also consolidated profits. We are expecting more than double-digit growth in terms of our earnings growth under IFRS 17. [Foreign language] And so thanks to the stable growth in our earnings, we expect continued upside in our ROE as well. Despite the regulatory tightening by the authorities, we expect to be able to continue to achieve a K-ICS ratio comparable to that of the leading companies globally. [Foreign language] And so, based on this kind of expectation on our company's solid fundamentals, we are reviewing gradual improvement of our shareholder return up to 50%.... and also are preparing our disclosure filing in accordance with the value-up guidelines that have been provided by the Korea Exchange. [Foreign language] In terms of the timing, well, actually, the revision to the enforcement decree to the Capital Markets Act is still pending. So, perhaps once that is finalized, we will be ready to prepare, provide, further details in terms of our value program, including, our plans in terms of our share buybacks and treasury shares. [Foreign language] So while the timing of the disclosure may also be important, we think more important is the fact that we have already set our direction in terms of the directionality of value up for our shareholders as we move ahead to gradually achieve that 50% shareholder return ratio. And so we have been expanding our returns steadily starting this year. [Foreign language]. The following question will be presented by Myung-Woo Kim from JP Morgan. Please go ahead with your question. [Foreign language] Yes, thank you for the opportunity. I will ask two questions, and I have one recommendation as well. First question has to do with your whole life insurance. It seems that there is a significant difference between companies in terms of the margins. Do you expect to be able to maintain second quarter like margins for your whole life products going forward? And what would be the drivers behind the change to those margins? Is it on account of marketing, product design, or assumptions regarding life expectancy or interest rate changes? If you could provide more details, that would be very helpful. Second question, if you look at the bar chart on page 14, you do state that you want to gradually improve your shareholder return. So, how much do you think would it would be fair to expect in terms of the shareholder return increase? Third is a recommendation. If you look at the practice of leading global and Asian insurance companies, since the earnings conference call is actually the most credible event, if you will, which engages the most number of stakeholders that are interested in the company, usually it is the CEO that hosts the conference call and directly provide answers to the questions. So as the representative insurance company or one of, I would be thankful if you could take that into consideration. [Foreign language] Yes, let me answer your question regarding whole life margins. This is Head of CPC Planning. [Foreign language] So I think the reason why you are asking the question is because some of our competitors have recently announced what were very low margins, and in comparison, our are about 10 times in multiple. [Foreign language] [Foreign language] The first reason that applies to all companies is the impact from the reduction in interest rates for whole life type products. Usually, that translates into a 20% decrease in the margins. [Foreign language] And then, there, of course, has been very intense competition in the market and a lot of promotional marketing spend as well, which directly impacts or lowers the profitability. So again, the changes to the margins are mostly on account of interest rates and marketing spend. [Foreign language] But, we actually were quite mindful of the possible changes to the interest rate environment. Also, we wanted to address the low margin issue for whole life starting last year. So we have now been classifying our whole life related products into three categories. First is health, second is whole life with special year or earmarked for certain specific purposes. And then the third category is regular whole life. [Foreign language] So it happens, among the three types. The second one, the special purpose type, whole life, actually, carry very low margins. So if you increase your sales of that particular product, that will definitely lower your margins, which is why we are focusing on expanding sales of the third type, the regular whole life, product instead. So while we do carry all types, we're going to focus on the regular whole life type to defend against any, further decline in margins. [Foreign language] So, just to recap, although there are certain issues outstanding regarding interest rates and also marketing expenses, that notwithstanding, we plan on continuing to manage very strong margins next year, focusing on our high margin product portfolio. [Foreign language] Okay, so this is, CFO. Let me take your second question regarding our, future next year plans for dividends and then, regarding your recommendation as well. [Foreign language] So, right now, it is actually quite difficult for me to say definitively what next year's dividend rate, also the dividend amount, will be. But still, as you have seen in our strong first half performance, we continue to expect upside in terms of our PNL earnings, and we see a sufficient room for year-on-year growth versus last year. [Foreign language] As we have shared previously, in the mid to long term, our goal is to improve our shareholder return to 50%. This is part of our approach to gradually enhance our shareholder return. [Foreign language] Regarding your recommendation about a participation by the CEO, we will certainly take that into consideration and see if we can make that happen. [Foreign language]. The following question will be presented by Jae Kyung Won from HSBC Securities. Please go ahead with your question. [Foreign language] [Foreign language] Yes. So thank you for delivering a very good performance despite the difficult conditions. I have three questions. It seems that, as you explained, because of the interest rates, CSM margins actually have gone down. It seems overall, compared to life insurance companies, which have seen a bigger impact, the non-life insurance companies actually haven't seen that big impact on their CSM margin from interest rates. So how much impact did you see in your CSM margin on account of interest rates? Second, it seems that between the exclusive agencies and exclusive FCs, you're, you've seen very rapid increase in the exclusive FC head count. So whereas the other companies are focusing on building their GA channels, you seem to be focused on expanding sales through the exclusive FCs. So could you elaborate more on your channel strategy? Third question, you said in terms of your value-up program, you'll have to wait and see, whether the enforcement decree to the Capital Markets Act actually is approved or not, before you are able to, finalize and share. Is it because of the pending provision in the enforcement decree, that sets certain disclosure requirements in case treasury shares account for more than 5%, for example? Or is there any other, potential issue regarding that amendment bill that could potentially have an impact on your value-up program? [Foreign language] Let me answer your question on the CSM margin and the exclusive FC channel. This is Head of CPC planning again. [Foreign language] So I think I provided a similar answer before, but for the whole lifetime products, they're obviously a refund type product, and so that would mean reserves are impacted significantly by changes to the interest rates. [Foreign language] In terms of the interest rate sensitivity, if you look on page 8, for where it says, "Death Benefits," the amount actually is KRW 635 billion. So it actually would have been 15%-20% higher, the CSM margin, if there hadn't been that decline in the interest rates. So although the actual impact may vary between companies, overall, I think we are seeing 10%-20% interest rate sensitivity on margins overall this year. [Foreign language] So in terms of the sensitivity of our whole life products, a 10 basis point drop in interest rates is associated with a KRW 2 billion-KRW 3 billion drop in our margins. But the non-life insurance companies are not affected impacted because they do not provide that kind of refund of reserve function. [Foreign language] Previously, the percentage of whole life type products was quite high at 70%, but while expanding shares of health type policies, we've been reducing the whole life portion now down to 30%-40%, precisely to decrease our exposure to the interest rate sensitivity. And CSM margin is. Whole is big and health is low. But our company, as I said earlier, is focusing on managing the portfolio with high profitability and stable interest rates. So in terms of the interest rate sensitivity to CSM margins, again, the refund type whole life products have high sensitivity, whereas it is very low for health related products. So we are again focused on stable management of our product portfolio, oriented around high margin, low sensitivity type products. Next, I will answer the second question regarding the increase in exclusive FC. Regarding the second question on the increase of exclusive FC. As you said, our Samsung Life's exclusive FC has increased significantly. In fact, there are more than 20,000 employees, and if you add the external workforce, the number has increased to 30,000. So as you have correctly said, we have seen a significant increase in the headcount. So internally, we now have more than 20,000 exclusive FC agents. It's more than 30,000 when we include the external agents as well. So this is a significant increase, similar to what we may have seen maybe 10 years ago, when the life insurance industry actually was very robust. One reason is that with the economy actually quite bad, especially for self-business owners, we have seen a significant shift of those self-business owners who are now going into insurance. And so, we have been recruiting from that pool, and we have been enrolling about 1,000 agents per month. Other market players actually have been focusing on their GA channel amid separation of product manufacturing and distribution. Whereas for us, we felt no need to go into or expand further into GA, because if you look at the per person productivity, assuming that we sell 200,000 worth, KRW 200,000 won in policy, we're achieving income of above KRW 500,000. So we will continue to focus on strengthening our exclusive channel rather than the GA channel. Yes, this is the CFO. Let me elaborate again regarding your value question. First of all, we are quite sorry for the delay in the disclosure of our value program. So we are quite appreciative of our investor expectations, and we are well aligned with the government's commitment to advance the local capital market. So we continue to make every effort as the leading company in the industry to fulfill our due role. So we are in the process of preparing our disclosure in line with the plan, the value planning guidance provided by the exchange. As you mentioned, currently the enforcement decree to the Capital Markets Act is currently pending, but when it is approved and goes into effect, there will be disclosure requirements that apply to companies holding more than 5% treasury shares. They have to disclose the purpose of the holdings, also their disposal plans for anything in excess of the 5% threshold. And another reason for this delay is that there are lots of implications in terms of the cancellation of treasury shares, in terms of our consolidated subsidiaries or change to the interest ownership. So because of lots of items that have to be considered, there has been a bit of a delay. So again, while the timing of when we actually come out with the value program, although that is important, I think today we have shared the directionality of our overall program already. We're expecting more than double-digit growth in terms of our company earnings this year, as well as we strive to gradually improve our shareholder return to 50% in the mid- to longer term. So on account of everything said, I think we can expect a significant increase to our dividend, or excuse me, in terms of our shareholder dividends compared to the previous year. The following question will be presented by Do-Ha Kim from Hanwha Investment & Securities. Please go ahead with your question. Yes, this may be a bit of a repeat, so sorry about that. We do understand the overall orientation or the direction for your shareholder return policy. We do understand that you have to consider some moving parts because you may include your share buyback plan as part of your value program eventually. But we want to have more color in terms of the expected timeline. You say mid to longer term, so would you be looking out the next three to five years? What is that timeframe so that we can understand better? Because in terms of the overall direction, increase, we had taken as a given. So can you provide more detail in terms of the expected timeline? Okay, let me take that question. That's a few full. So, our presentation slide shows the overall direction of our Corporate Value-up Program. And, while we will of course share the finalized version with you at the time of disclosure, the 50% commitment in the mid- to longer-term actually is targeting the next 3-4 years. So starting this year, we will continue to gradually and steadily increase the shareholder return. And I think that would be the fair understanding. The following question will be presented by Jun-Seop Chung from NH Investment & Securities. Please go ahead with your question. Yes, I also have a question on your value-up program. So previously, in terms of your shareholder return policy, you had committed to a annual gradual increase in your dividend per share, and you shared your payout target of 35%-45%. So compared to that prior communication, is your value-up program actually quite different, or how do the two link up? So, the payout target 35%-45% versus the shareholder return target of 50%, is it different or are they consistent? If you could provide further detail. And also the gradual increase to dividend per share, is that still in place or intact? [Foreign language] Yeah, I will take that question. [Foreign language] Yes. So as you mentioned, you are correct. Our prior communication in terms of shareholder return policy was consistent annual increase to our dividend per share and dividend payout between 35%-45%. [Foreign language] In terms of our plan going forward, we want to further increase the payout target up to 50%, as we seek continued upside. [Foreign language] Since we continue to see a solid improvement to our company earnings, obviously, as we increase our payout, our dividend per share will also likely increase. [Foreign language] This concludes the conference call for Samsung Life. Further questions, please contact us at IR team.