Good morning and good evening. Thank you all for joining the conference call for the Samsung Life earnings results. 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 Life's first half of fiscal year 2026 earnings results. Good afternoon, everyone. This is Sunjin Kim, Investor Relations Part Leader. Thank you for joining us today for Samsung Life's 2026 first-half earnings presentation. Today's call is scheduled for one hour, starting with the earnings presentation delivered by our CFO, Mr. Wan-sam 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 the domestic and overseas market conditions and operating environment. Let me now hand over the presentation to our CFO, Mr. Wan-sam Lee. Good afternoon, everyone. This is the CFO, Wan-sam Lee. I would like to sincerely thank our investors and analysts for taking the time out of your busy schedules to attend our first-half 2026 earnings presentation call. Let me start with our key financial results and major business topics for the first half of 2026. Our consolidated net profit for the first half grew by 35.8% year-on-year to reach KRW 1.9 trillion, demonstrating our solid earnings capacity. Insurance service results declined by 35.9% year-on-year due to higher operating variance, despite stable CSM profits. On the operating expense side, we recognized a one-off expense of KRW 83 billion in the first half, mainly due to higher wages, including a temporary increase in retirement benefit provisions following the outcome of Samsung Electronics T.I lawsuit. On the claims payment side, the negative operating variance widened from a year ago due to increase in medical service usage. Given these one-off factors, it seems inevitable to achieve growth for the annual insurance profit on a year-on-year basis. Nonetheless, we will make every effort to secure at least KRW 3 trillion in new business CSM each year, driven by our strong portfolio and sales capabilities across our exclusive and non-exclusive channels. In addition, we will improve our efficiency metrics, such as our loss ratio and expense ratio, with the aim of turning around our insurance profit to show growth going forward. We have seen our first-year loss ratio improve compared to the beginning of this year, thanks to our newly established framework to rigorously manage our first-year loss ratio by improving our product structure and stricter underwriting standards. We will further strengthen our efforts so that these initiatives translate into an improvement in the overall loss ratio. Investment profits surged from a year ago, supported by higher dividend income and stronger consolidated and equity method earnings from subsidiaries, such as Samsung Securities and Samsung Asset Management. Notably, while still modest in absolute terms, earnings contribution from the Thailand and China business have grown at an accelerating pace of growth. That said, amid heightened volatility in financial markets, including interest rates and equity prices, hedging losses on variable insurance within investment income experienced a slight increase. We run a hedging program to effectively manage our capital and earnings volatility associated with the minimum guarantee options embedded in our variable insurance products. Going forward, we are operating an internal task force, testing out different strategies for different market conditions to achieve the optimal strategy in periods of extreme market volatility, such as this year. New business CSM recorded KRW 1.7 trillion in the first half, growing by 20% year-on-year. We are well on track to achieve our annual target of KRW 3.2 trillion. Taking profitability and market conditions into account, we plan to continuously secure stable new business CSM by implementing a flexible portfolio strategy between the highly profitable health insurance and the whole life insurance solely available to life insurers. For our CSM balance, we reflected key assumption changes in the second quarter in accordance with the Financial Supervisory Service's guidelines. These changes include applying conservative loss ratio assumptions to new riders, a more defined segmentation of riders, and adjusting expense ratios assumptions to reflect inflation and changes in cost drivers. As a result, there was a one-off CSM adjustment. We expect additional guidelines changes in the fourth quarter as well, but expect the impact to be limited as most of the guidelines have been reflected as of June end. Based on this, we will pursue sustainable growth of improving our CSM balance going forward. Amid a tightening regulatory environment, such as the full implementation of the GA 1,200% commission rule and the cap on total sales commissions, the environment for the insurance industry has shifted to prioritize profitability and sustainability over top-line growth. We anticipate these regulatory changes will foster healthy change in the midterm by promoting qualitative growth across sales channels and through a more rationalized expense structure. Accordingly, we plan to reinforce our efficiency-focused sales strategy by further strengthening the competitiveness of our exclusive channel and through qualitative growth of our GA channel. Our exclusive channel has continued to grow steadily with a net increase of approximately 2,100 agents year-to-date. Our exclusive agents are educated through systematic training programs and generating new business performance based on the highest retention rates in the industry. We will further differentiate the competitiveness of our agents by providing comprehensive support across the overall sales process, including AI-based sales tools and product educations. For the GA channel, we continue to strengthen our portfolio around high-margin whole life and general health products, while enhancing AI-enabled sales support systems and expanding partnerships with large GA firms. In particular, under a healthier market environment following the introduction of the GA 1,200% commission rule, we will continue to expand our market presence by strengthening sales infrastructure, including broader support through AI tools. Next, turning to the capital adequacy, our KICS ratio as of June recorded 208%, while Tier 1 capital KICS ratio remained stable at 177%. Going forward, we will continue to maintain industry-leading capital adequacy by securing high-quality new business CSM, improving operating efficiency, and rigorous ALM management centered on Tier 1 capital KICS ratio. In the second quarter of 2026, the surrender value reserve amounted to KRW 3.1 trillion, up by KRW 1.4 trillion from KRW 1.7 trillion at the end of first quarter. Approximately KRW 0.5 trillion of surrender value reserve is generated on a recurring quarterly basis due to new business sales. In addition, increased market volatility resulted in an additional impact of approximately KRW 0.9 trillion, due to the valuation difference between the reserves and liabilities of our variable products. However, this increase largely reflects temporary effects from heightened market volatility. If market conditions, including equity prices and interest rates stabilize going forward, we expect the pace of increase in the surrender value reserve to gradually moderate. We also have sufficient distributable earnings and therefore, the increase in the surrender value reserve is expected to have a limited impact on our shareholder return policy. Regarding the shareholder return, we plan to maintain a foreseeable dividend policy under the principle of increasing shareholder dividends at a rate above the growth rate of recurring profits. We will maintain a consistent shareholder return principle, unwavering from short-term earnings volatility, while strengthening market confidence as a dividend growth stock by improving the quality of earnings and enhancing capital efficiency. In addition, we will continue to explore ways to effectively utilize surplus capital, including expansion into new business. Additionally, we understand that our investors are very interested in the timing of our value up program announcement. Taking into account measures such as treasury share cancellation plans, we are required to make the announcement before next year's annual general meeting of shareholders. We will do our best to make the announcement as early as possible. Despite domestic and overseas economic uncertainties, Samsung Life will continue to pursue sustainable growth based on industry-leading sales competitiveness, asset management capabilities, and solid capital foundation. Going into the second half, we will focus on delivering tangible results toward our goals of securing more than KRW 3.2 trillion in new business CSM, achieving double-digit growth in annual earnings, and enhancing shareholder returns based on these results. We will now move on to the Q&A session, and we will do our best to address your questions. Thank you. [Non-English content] 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. [Non-English content] The first question will be provided by MW Kim from JPMorgan Securities. Please go ahead with your question. [Non-English content] Yes. Thank you very much. I would like to ask two questions. First is about the high net worth individuals, the baby boomers who are approaching retirement age. Obviously, over the last decade or so, real estate property prices have continued to rise. Over the past year, the KOSPI has delivered very strong performance. It is fair to say that the high net worth asset base is probably much bigger. In terms of your addressable market, how much further upside do you see in terms of the addressable market over the next 10 years? What is your outlook in terms of further upside? I also wonder if the company has already established a future strategy on securing future earnings. If so, if you could provide more of a quantitative outlook, I would appreciate it as well. Second question is on risk management. The 10-year KTB is actually yielding at above 4%. With rising interest rates, this is associated with higher risk of lapses, also added pressure in terms of liquidity management as well. Can you share the latest trends in terms of the lapse rates that you have been seeing, and what are your stress scenario assumptions? Also, please share your plans in terms of liquidity management. We have also seen a significant impact on your financials from the volatility from the equity market, also from the variable account reserves as well. If you could also share some measures by the company to mitigate against that kind of financial impact or volatility, I would also appreciate it. [Non-English content] Yes, this is Hur Jung Woo, Head of the Channel Marketing Team at Samsung Life. [Non-English content] Yes, as you have said, there is a very high concentration of wealth, particularly among those age 60 and above. For all of Korea, based on our market intelligence, we believe there is about 470,000 individuals, high net worth customers with assets above a certain level. Of that pool, above KRW 1 billion in financial assets. Of that pool, 50,000 actually are existing Samsung Life policyholders or our customers. [Non-English content] This is based on financial assets only, by the way. You will know that Samsung Life, among the insurance companies in Korea, has a very unique position that we have a family office within our organization. Our family offices caters to the ultra high net worth individuals, providing not only whole life or other insurance type products, but a diverse lineup of other services including beneficiary certificate of funds, also trust consultation as well across our FP centers that are located in eight key geographies. [Non-English content] For the security firms, their focus in terms of their business is financial asset appreciation to grow wealth. For the banks, it is to maintain that wealth. As an insurer, for us, the transfer of that financial wealth or assets is very key. Through our whole life product mechanism, the transfer of wealth is our area of focus. [Non-English content] We obviously have a very extensive customer base of customers who hold either our whole life or other term insurance policies. The total amount of death claims paid out actually is quite extensive at around KRW 60 trillion, the payable amount. We are targeting those individuals to expand into the trust business. We have been promoting a service which is entrusting their death cover claims to trust. This actually provides for assurance in terms of the smooth transfer of the death benefits to the designated beneficiaries. This is a key part of our new business strategy to expand into the trust business. [Non-English content] Already the AUM is now at around KRW 800 billion to date. We expect to exceed the KRW 1 trillion mark within this year. The nearest competition of the second ranked insurance company in Korea is very far behind with AUM of just KRW 100 billion as we widened the gap. For WM, we are also doing quite well. If required, we will try to create another opportunity where we can share more materials and present to our analysts. [Non-English content] This is the CFO. Let me add just a little bit. [Non-English content] Yes. We have a very clear recognition that the high net worth market is in fact growing. In terms of the underlying infrastructure to cater to this segment and to manage it well, I would say that we are by far the top performing in the industry. We can leverage our very strong exclusive channel, and we are focusing on continuing to grow the assets consulting capacity of our channel. We are also expanding beyond just whole life, particularly to single payment type products and policies that have underlying needs within high net worth markets. [Non-English content] Yes, this is Lee Jee-Sun, Head of the RM Team. Let me take your second question on liquidity management. [Non-English content] As you said, with rising interest rates and also an abrupt increase in share prices, it is true that we also have seen a slight increase in our lapse ratio as well. [Non-English content] However, although it did go up in the first half in particular, into the second half of the year, amid widening volatility in the equity market, we have seen recovery more towards stable trends. [Non-English content] But just as a baseline, we continue to track on a day-to-day basis our asset versus liability, just in terms of the size, and we continue to forecast the gap in terms of the balance. We have identified different crisis scenarios and identified the minimal level of liquidity that must be defended in every crisis. [Non-English content] Based on our management criteria, we are under normal conditions at the moment. But starting two years ago, we actually have been enforcing tighter liquidity control aligned to stage one in the scenario analysis. [Non-English content] We are continuing t o carry out scenario analysis, assuming very high risk contingency situation where there may be an abrupt increase in labs similar to what we saw previously during the Asian financial crisis. We are testing on a quarterly basis if we have the means within Samsung Life to cover against that kind of liquidity risk and exposure. [Non-English content] Our conclusion to date is that we do not see any source of major concern. However, with the market volatility as wide as it is now, we intend to continue very tight management based on a conservative stance. [Non-English content] Yes, this is Kim Hyejin, Head of Asset Management. Let me take your third question. [Non-English content] In the first half, certainly with very significant widening of market volatility, we have seen elevated hedging related loss. [Non-English content] Obviously, the hedging was for the purpose of hedging against the risks associated with minimum guarantees that were provided as an option on our variable account policies. If we had not hedged against that risk, potentially there could have been an impact of around KRW 1 trillion to our P&L. Obviously, we believe we need to continue to hedge against this potential risk. [Non-English content] Because this should not be an added burden to our financial stability, we are running our own task force on variable product hedging specifically to analyze the root cause of the recent developments and to develop numerous hedging tools or means so that we can minimize the error rates. [Non-English content] We intend to refine our analysis and mitigating measures further so that we can be more defensive against market volatility such as we saw in the first half. [Non-English content] Yes, this is the CFO. I would just like to add that we actually have been moving quite proactively in terms of managing our liquidity, particularly given the wide market or widening market volatility. We actually have been trying to tap a lot of the widely available cash assets that are circulating in the market by developing certain products that can cater to not only retail or individual customers, but to corporate customers as well. We have started the sales of these new products in July, and we will continue with this type of product-driven strategy as well. [Non-English content] The following question will be presented by Do-ha Kim from Hanwha Investment & Securities. Please go ahead with your question. [Non-English content] Yes. I would like to ask a question on investment and dividend. I am looking at the separate basis numbers which may not match exactly with the numbers that you are looking at. But in terms of the variable hedging loss that you mentioned, what is the exact size? Just in terms of the special account, I think it is somewhere around KRW 4 billion. Is that consistent with the total amount, or is there another portion that also impacts your general account? Sorry, KRW 84 billion. Second question regarding the dividends. I think on numerous occasions the CFO has said that while you are not able to make any shares, still you will try to address the request, the numerous requests to try to share, to give more color as quickly as possible. That being said, a lot of time has passed and still we have not received that kind of information. Will you at least be sharing that kind of update, at least within this year? If you can share. I don't think any of the investors are expecting any increase in the DPS per se, but we are interested whether you have plans to share some of your special earnings. Could you explain further? [Non-English content] Yes, this is Kim Hyejin from the Asset Management Team. [Non-English content] In terms of our variable hedging loss, actually the hedging is done using fees that are received through our general accounts. In fact, that means all hedging related losses are specific to our general accounts only. [Non-English content] The hedging related loss actually totals about KRW 85 billion. [Non-English content] Yes, this is the CFO. Let me elaborate on our dividend policy, also the Samsung Electronics related special dividend that you asked about. [Non-English content] I'd like to seek your understanding in advance that I am not able to share the detailed numbers or the exact timing today. [Non-English content] We obviously are targeting a long-term shareholder return target of 50%, driven by robust earnings growth and consistent increase to our dividend per share. We continue to work hard to drive for that kind of consistent incremental improvement. [Non-English content] As you are well aware, we have been growing our dividend per share at an annual growth rate of above 16%, and we have committed to continuing to expand our dividend per share at above the rate of growth for our recurring earnings. We are committed again to doing our best to anchor ourselves as a very stable dividend growth share. [Non-English content] Regarding Samsung Electronics disposal gains, also possibility of special dividends. [Non-English content] When we were determining our dividend policy earlier in 2025, we committed to expanding dividend per share above ordinary growth. Also at the time of disposing regarding disposal gains from SEC shares, we also determined that they would be included in the pool of funds for dividends, and that policy remains unchanged today. [Non-English content] Regarding special dividends, regarding SEC shares, I do know that this is a matter of great interest, but it's very difficult for me to share any specifics in terms of what exact timeline we expect. Also, the size, given the different factors that may lead to changing conditions. [Non-English content] Once there is more clarity in terms of the special dividend, in terms of the size and likely timing, and on the assumption that we are maintaining our K-ICS ratio above a certain adequate level, we remain committed to continue to improve our DPS year- on- year. [Non-English content] The following question will be presented by Byung-gun Lee from DB Securities. Please go ahead with your question. [Non-English content] Yes. My first question has to do with the surrender value reserves. You did elaborate on the variable accounts breakdown. I am interested in the surrender value reserves as well. Earlier this morning, there was a non-life company that reported their earnings. I think in terms of the absolute size of the accumulation, perhaps it is quite similar, 80%, but perhaps the breakdown or the composition might be different, which is why I ask. You talked about an ordinary level of about KRW 500 billion in surrender value reserves. What are the factors? Maybe operating expense overruns relative to the budget. Beyond that, what other factors may have an impact? My second question is regarding the 1,200% rule that will be implemented starting next year, I believe, where an aggregate cap will be enforced starting 2027, with the government also talking about possible sanctions being written into the law as well. Assuming the current level, if the rule is adopted, to what extent will your new business acquisition expense be reduced? If you have some internal numbers, I would like to hear. [Non-English content] Yes, this is Sunny Cho, Head of the Actuarial Team. Let me take your first question. [Non-English content] In terms of the surrender value reserves, this actually represents the difference between our liability measured at cost versus liability measured at fair value. Anytime we issue a new product, then the fair value liability becomes a negative, which results in that difference. [Non-English content] Based on our analysis of this difference, actually, it is not a meaningful level for us. However, if you need more further details, please contact the IR team. [Non-English content] Okay. On an ordinary quarterly basis, yes, you are correct. The surrender value reserves typically are about KRW 500 billion per quarter. As of the second quarter, the total reserve amount is about KRW 3.1 trillion. With the exception of the variable products, the surrender value reserves are negative for all other types of policies. [Non-English content] Yes, this is the CFO. Let me discuss the second question a bit more. [Non-English content] In terms of expected reduction to new business or business acquisition costs, we expect it will be about 10% reduced cost for us, 20% for the broad industry. [Non-English content] We want to ensure that the reduced new business acquisition expense does not lead to any contraction in sales activities. We have been focusing on non-pricing related competitiveness and trying to activate more, or excuse me, to promote more activities on the part of our sales organization. [Non-English content] In order to continue to boost sales, we are actively deploying AI-enabled tools and also developing AI-based sales practices as well to drive further sales growth. That we can deliver on our annual new business CSM target of KRW 3 trillion or above. [Non-English content] The following question will be presented by Yong-Jin Seol from iM Securities. Please go ahead with your question. [Non-English content] I had a question mostly on the impact from the changes to the actuarial consumptions. It does seem that you had some CSM adjustment this quarter, which could be the mixed effect of positive and also detracting factors. If you could provide a breakdown, I appreciate it. Also, what type of impact do you think this may have on the simplified issue type of coverage that you are planning to release in the fourth quarter? Also, what is the possible impact in terms of new business? What kind of an assumption changes do you expect in the fourth quarter? What can you expect from the changed assumptions in the fourth quarter? [Non-English content] Let me elaborate more on the impact of the changes to the actuarial assumptions in the second quarter, on the assumptions applied for the simplified coverage planned for the fourth quarter. [Non-English content] In terms of the changes to the actuarial assumptions, it can be divided into two parts, one on the loss ratio, the other on the expense assumption. For the loss ratio assumptions, conservative loss ratio assumptions are to be applied for newly introduced coverage, also certain type of renewable products as well. There have been more refined standards. This could potentially pressure our CSM, but on the expense assumption side, which stipulates that inflation-related assumptions shall be reflected, we had already been doing that already, so that will not be an impacting factor. [Non-English content] Regarding the simplified coverage in the fourth quarter, where a loss ratio of 90% shall be applied, in that case, that could act in part as a negative factor. Given how our efficiency metrics actually have been improving, the impact will be to a lesser extent in the fourth quarter versus the second quarter. [Non-English content] The tightening of the loss ratio related assumptions actually are more on the conservative side relative to our underlying fundamentals. But with time, as the time of mortality approaches, for example, and the statistics are updated, we think in the mid to longer term, it shall actually serve as a plus factor for us. [Non-English content] Yes, this is from the Channel Marketing Team. Let me answer about the impact to our new business results. [Non-English content] For the first half, our new business CSM multiple is around 13x. If the changed actuarial assumptions had been applied in January, it would have been lower by about 1.7x. It would actually be about 11.3x. [Non-English content] However, in the second half, as our CFO explained, we will focus very much on expanding sales of our high margining health related policies as well as the traditional whole life products as we secure a stable inflow of new business CSM. [Non-English content] As of July, after factoring in the enhanced assumptions, we are still expecting to maintain new business CSM multiple of 13 times. We recorded KRW 1.7 trillion in the first half in certain new business CSM, and we will work hard to deliver above that in the second half. [Non-English content] The following question will be presented by Jun-sup Yung from NH Investment & Securities. Please go ahead with your question. [Non-English content] Yes. First I'd like to ask about your M&A or capital allocation strategy. I believe that initially you considered a potential acquisition of KDB Life, but then decided to not take part in the main bidding. What was the background to your initial interest, and why did you ultimately decide to drop out? Also, can you provide the overall strategy or directionality in terms of future M&A? What kind of sectors you may be looking at, what size and what would be the expected financial impact? The M&A funding may actually lead to a decline in your K-ICS ratio. What would be the maximum amount of spend that you will be willing to consider? Second question is, I think, of course, thanks in part to your own effort, but also thanks to the rise in Samsung Electronics share prices, we have seen your net asset value actually go up considerably. But if, of course, overall, we believe that share prices should continue to rise. But if the movement actually goes in an unexpected direction for either yourself or Samsung Electronics, what would be the possibility that Samsung Life could be classified as a low PBR stock? What are your thoughts? And then what kind of response measures do you have in place? [Non-English content] Yes, this is the CFO. Let me explain the background to why we were looking at KDB, the acquisition, and also more on our M&A strategy. [Non-English content] I must seek your kind understanding that due to disclosure requirements, I am not able to share too much detail in terms of why we decided to at first join and then ultimately decided not to go ahead with the bidding. [Non-English content] Initially, we felt that potentially there could be some strategic synergy with KDB Life Insurance in terms of overall channel operations, products, and also asset management as well. But based on our assessment, we reached the conclusion that that may not be practical or achievable, which is why we decided to drop out from the bidding. [Non-English content] Regarding M&A, given the limitations to growth in the domestic life insurance market, we explained previously that we wanted to expand quite proactively into the overseas markets. [Non-English content] For our current overseas operations in Thailand and China, actually, we have seen very rapid growth in just the size of the earnings from those two markets. We are planning expansion in those two markets. Building on that successful experience, we will seek out actively other promising M&A opportunities. [Non-English content] We are looking beyond the emerging market and the Asian market into advanced markets like the U.S. as well as we explore good M&A opportunities. To move more proactively, we actually engaged in an outside consultancy in the first half. We established our overseas business strategy, and we will gradually be implementing that strategy in phases. [Non-English content] As an insurance company, obviously ALM remains our number one priority. That being said, we also want to maximize our investment returns as well. We are actively seeking out promising investment opportunities as well. For alternative investments in particular, we are examining very closely potential investments that are both safe and with good return profile as well. We will be implementing these investments in phases. [Non-English content] This is the Head of IR. Regarding the likelihood that we may be classified as a low PBR stock, I believe the likelihood of that occurring is very weak or thin at best. Apart from the scheme itself, as our CFO has explained, we continue to work to improve our PBR by gradually increasing our shareholder return ratio, also using our excess capital to drive M&A or other new business opportunities. [Non-English content] The following question will be presented by Sinyoung Park from Goldman Sachs. Please go ahead with your question. [Non-English content] Yes. Thank you. I just have one question. I think the CFO has consistently said that the company will be improving the dividend per share at a growth rate above the growth for ordinary earnings or recurring earnings to broaden the shareholder returns. Could you explain the exact definition of what you mean by recurring or ordinary profit or ordinary earnings? That would be very helpful. [Non-English content] Yes, this is the CFO. Thank you for the very good question. [Non-English content] In terms of what we mean by ordinary profits, I think everybody will pretty much have the same idea, but as an insurance company, it is fair to say it is normalized operating profit. Normalized means that any one-offs are removed. Basically, we are talking about operating profits. [Non-English content] I know maybe there is a hidden question there. I think everybody is interested in knowing whether any disposal gains on Samsung Electronics shares will be included in the pool of funds available for distribution in relation to Samsung Electronics special dividends or share buyback and cancellation. I will reiterate that all of those types of gains or proceeds will be included in the funds available for dividend distribution. [Non-English content] Thank you very much. If there are no further questions, we will now conclude our earnings call. Thank you very much.