THE GL THE GLOBAL OBAL PIO PIONEER NE 01 CORPORATE …€¦ · SF&MI realized a a record-high pre-tax profit for the fiscal year. Net profit totaled KRW598.7 billion, which was second

INVESTOR RELATIONSCorporate Planning Division, Samsung Fire & Marine Insurance. Co., Ltd.

Samsung Insurance Bldg. 87, Euljiro -1ga, Jung-gu, Seoul, Korea, 100-782

E-mail: [email protected]

Telephone: 82-2-758-7535

Facsimile: 82-2-758-7831

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ir.samsungfire.com

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THE GLOBAL PIONEERA n n u a l R e p o r t 2 0 0 8

PROFILE

01 CORPORATE OVERVIEWMESSAGE FROM THE CEO

CORPORATE DIRECTORY

02 CORPORATE STORYVISION & STRATEGY

BRAND STRATEGY

HIGHLIGHTS

2008 AWARDS

03 REVIEW OF OPERATIONAUTOMOBILE INSURANCE

LONG-TERM INSURANCE

COMMERCIAL INSURANCE

ENTERPRISE RISK MANAGEMENT

04 SUSTAINABILITY MANAGEMENTETHICAL & ENVIRONMENTAL MANAGEMENT

CORPORATE COMMUNITY RELATIONS

SPORTS

CULTURE

05 FINANCIAL SECTIONMD&A

FINANCIAL STATEMENTS

WORLDWIDE NETWORK & SAMSUNG AFFILIATES

12

15

Corportate

Story

20

22

24

26

30

32

34

36

41

50

102

Contents

An

nu

al Rep

ort

20

08

TH

E G

LOB

AL P

ION

EE

R

18,490

20,741

23,092

06FY FY FY07 08

Total Assets(In billions of Korean Won)

Net Profit(In billions of Korean Won)

06FY FY FY07 08

341

477

599

SF&MI realized a a record-high pre-tax profit for the fiscal year. Net profit totaled KRW598.7 billion, which was secondto none in the industry. Direct premiums written were up 6.4% year-on-year to KRW9,744.9 billion, net profit climbed by25.6% to KRW598.7 billion, and adjusted net profit including an increase in catastrophe reserves jumped 27.2% toKRW671.3 billion. Total assets grew 11.3% to KRW23,092.2 billion while catastrophe reserves increased 7.3% toKRW1,059.3billion.

Financial Hightlights

Direct Premiums Written

Increase in Catastrophe Reserves

Investment Profit

Operating Profit

Adjusted EPS (in KRW)

6.4%

41.5%

14.9%

18.4%

31.2%

Summary ofIncome Statements(In billions of Korean Won)

Summary ofBalance Sheet(In billions of Korean Won)

9,74573

888856

15,408

Cash & Equivalents

Stocks

Real Estate

Total Assets

Total Liabilities

Total Liabilities andShareholders’Equity

5.2%

-2.8%

4.9%

11.3%

11.0%

11.3%

5961,9751,088

23,09219,22923,092

102/10305.3 Worldwide Network & Samsung AffiliatesSamsung Fire & Marine Insurance Annual Report 2008

SAMSUNG AFFILIATES

Samsung Fire & Marine Insurance Co., Ltd.

has affiliates in the Samsung Group which includes the below companies.

Finance


Samsung Life Insurance Co., Ltd.

Samsung Card Co., Ltd.

Samsung Securities Co., Ltd.

Samsung Investment Trust Management Co., Ltd.

Samsung Venture Investment Corporation

Other Samsung Companies

Samsung Corporation

Samsung Engineering Co., Ltd.

Cheil Industries Inc.

Samsung Everland Inc.

The Shilla Hotels & Resorts

Cheil Communications Inc.

S1 Corporation

Samsung Lions

Samsung Medical Center

Samsung Economic Research Institute

Samsung Advanced Institute of Technology

Samsung Foundation of Culture

Samsung Welfare Foundation

Electronics

Samsung Electronics Co., Ltd.

Samsung SDI Co., Ltd.

Samsung Electro-Mechanics Co., Ltd.

Samsung Corning Co., Ltd.

Samsung Corning Precision Glass Co., Ltd.

Samsung SDS Co., Ltd.

Samsung Networks Inc.

Chemicals

Samsung Total Petrochemicals Co., Ltd.

Samsung Petrochemical Co., Ltd.

Samsung Fine Chemicals Co., Ltd.

Samsung BP Chemicals Co., Ltd.

Machinery

Samsung Heavy Industries Co., Ltd.

Samsung Techwin Co., Ltd.

The Global Pioneer

SF&MI aims to be the best property/casualty insurance in the 21st century. It willachieve this goal with a customer-oriented attitude and unmatched financialsoundness. SF&MI is undisputed No.1 non-life insurance company in Korea interms of size, financial condition and management practices. We have partneredwith leading global insurance companies by actively expanding all around theworld, including the U.S., Europe, Indonesia, China, Japan and Vietnam, so as toachieve steady growth and become a global competitive financial serviceprovider. SF&MI will continue efforts to strengthen its competitiveness byadopting advanced financial skills, enhancing product development capability andinnovating insurance marketing practices.

The corporate values of SF&MI stem from distinct strategies and passionate “newpioneer” spirit for the benefit of our customers. SF&MI is undeniably the finestinsurance company in Korea, which always provides high quality insurance servicewith the first priority being put on its customers and complies with regulations andstandards to set an example of honest and responsible business practices.

Card ofPioneer

01

We will be a global financial service provider that

ushers the world into a better future.

Global Power

year1978

15

The first-ever overseas office

SF&MI opened its first overseas office in London on May 25,1978. It was a bold and preemptive move for a Korean financialcompany at that time. It also opened an office in Indonesia in1997 and in Vietnam in 2003, and established a local subsidiaryin China in 2005 for the first time as an insurance companyaround the world.

Locations World-Wide

SF&MI, after planting its flag in London, has opened offices andlocal subsidiaries in 15 regions in eight countries including theU.S., China, Japan, Indonesia, India, Singapore and Vietnam. Indoing so, we have geared up to be the No. 1 financial group notonly in Korea but in the global marketplace.

We are committed to growing as an exemplary and ideal company that

can be a role model for others around the world.

Global Standard

25.2%

A+

year-on-year growth in net profit in 2008.

SF&MI posted KRW598.7bill ion or a 25.2% year-on-yearincrease in net profit in 2008, which was the highest record in thecompany’s history. As a result, the company’s total assetstopped the KRW21,000 billion mark, further fueling its growthengine to become a global player.

A.M. Best Company for Seven Years in a Row Ratingfrom S&P for Six Consecutive Years

SF&MI earned a seventh straight A+ (Superior) rating from A.M.Best Company, a world- renowned insurance rating andinformation agency. We also received an A+ rating from S&P forsix years in a row. Such recognition is clear evidence that we area globally competitive financial firm.

We will make the world a better place for

everyone rather than merely indulging in profit taking.

Global Mind

126 126 guide dogs from the SF&MI guide dog schoolhave been donated for the blind

SF&MI’s guide dog school is the only one in the world that issponsored by a private business. For its valuable efforts, theschool received an official certificate from Korea’s Ministry ofHealth and Welfare. Since donating the first guide dog in 1994, ithas provided guide dog training programs two or three times peryear. So far, 126 guide dogs have been donated, and 54 of themare currently helping blind people.

336 336 children of traffic accident victims are providedwith support for living

Since 1993, SF&MI has supplemented the living costs of primary,middle and high school students who lost their parents in trafficaccidents. We also have provided gifts upon their entrance toschool or on national holidays. As many as 234 such childrenhave grown up to become responsible members of our society,and another 102 are currently provided with assistance fromSF&MI.

Message from the CEO

We sincerely thank our shareholders for their continued support and

encouragement in this unprecedented time of global economic hardship.

Corporate Overview

To Our Shareholders:

With the early summer heat building to a crescendo, two months have passed since fiscal year 2009 began. In fiscal 2008, a

global economic cataclysm reverberated around the world. The spill-over of the credit crisis that started in the U.S. was felt in

global financial markets and on Main Street. Domestically, we also suffered from declining exports, reduced consumption,

unemployment, and foreign exchange and stock market volatility.

It was a turbulent year for the industry, as well, as competition tightened due to diversification of sales channels with the cross-

selling of life and non-life products. Price competition also intensified with e auto insurers.

Nevertheless, despite such difficulties, Samsung Fire and Marine Insurance (SF&MI) reported earnings of KRW9,744.9 billion in

direct written premiums, up 6.4% from the previous year, and an increase of KRW122.2 billion in net profit as we reached a

record profit of KRW598.7 billion.

Total assets soared to KRW23,092.2 billion, up KRW2,351.7 billion from last year, and catastrophe reserves surged 41.5% to

KRW72.6 billion, adding to the robustness of our financial condition.

On top of this, SF&MI has enjoyed a rating of A+ from S&P for six straight years, a testimony to the strong financial soundness

and credit worthiness of the company. We are the only financial firm in the country to have been ranked first for eight years in a

row in the National Consumer Satisfaction Index (NCSI). Built on the company’s excellence in business, we have also been

committed to fulfilling our social responsibilities of sharing what we have with our neighbors in need. To this end, we have

assisted the children of traffic accident victims, donated guide dogs for the blind, partnered with rural communities, and raised

donations through the “KRW500 Gift of Hope” fund, a voluntary initiative of risk consultants (RC) to improve the living conditions

of people with disabilities.

My Fellow Shareholders,

In fiscal 2009, it is considered unlikely that the global economy will experience a strong rebound from financial instability and the

economic downturn.

The local insurance industry is also expected to be mired in a vicious cycle, in which corporate restructuring and a decrease in

disposable income will force people to reduce consumption and investment. This could lead to fewer new insurance contracts

being signed and possibly, even to the surrendering of existing policies. At the same time, competition among insurers will

become fiercer with implementation of the Capital Market Consolidation Act, changes in regulations, diversification of sales

channels and the breaking down of barriers between areas of business.

2010

쪾Solidify foundation for profitability쪾Improve direct communication

channel

쪾Strengthen core business areas

2015

쪾Improve business structure쪾Attain sound profit structure

쪾Become an outstanding globalfinancial institution

2020

쪾Expanding business areas쪾Attain advanced

competitiveness in the financialmarket

쪾Attain global capability

SYSTEMATICAPPROACHSTRATEGY

12/1301.1 Message from the CEOSamsung Fire & Marine Insurance Annual Report 2008

June 4, 2009

DaeSub Chi

President and CEO Samsung Fire & Marine Insurance

In response, with a new pioneering spirit full of passion, enthusiasm and the pursuit of excellence, SF&MI has set clear priorities to

continue its march to the top in the global marketplace.

First, we will be committed to enhancing our global competitiveness to keep abreast of globalization.We aim to compete with global players by training our staff professionals in the knowledge and skills required to compete at the

global level and to have global perspectives, while upgrading our existing capacities to global standards. Utilizing our core

competencies, we will go beyond the already saturated domestic market to seek new growth engines in wider markets.

Second, we will build enduring corporate value by securing cost competitiveness.The insurance industry will not be immune from the economic turmoil roiling the world’s markets. We may face challenges such as

decreases in profitability and new contracts, but through a sobering reality check, the management and employees of SF&MI will

work for comprehensive improvement and innovation in sales, compensation, underwriting, risk management, asset management,

and sales channels. We will also seek to reduce costs so as to gain a distinct competitive edge in terms of pricing that cannot be

duplicated by others. With the launch of new services and products such as the company’s “My anycar”online auto insurance,

introduced in March, we will strengthen our leadership position in the industry and lay a foundation for becoming a global leading

company in every aspect.

Third, we will turn the crisis into new opportunities while remaining honest and sincere with our customers.Our clients are the root of the company’s existence and are the reason SF&MI is here. The best way to turn the crisis into new

opportunities in these troubling times is to put ourselves in the customers’ shoes. In initiating each and every managerial activity, we

will place a top priority on building customer confidence and customer satisfaction. We will work to the best of our ability to

continue exploring new markets, develop new products, and enhance the competencies of our employees, thus maximizing

customer satisfaction and strengthening the company’s platform for future growth.

In fiscal 2009, as in the past, SF&MI employees will be creative contrarians with a mindset based on the concept, “From crisis comes

opportunity.” SF&MI’s employees have the passion, confidence and spirit to take up the challenge of creating excellence as the

company seeks to join the ranks of the world’s top financial firms in the 21st century.

To make a more promising future for the company, we need and ask for your continued support and guidance. As we look to a brighter

future for the company, I wish you and your family the all the best in happiness and success.

Sincerely,

Corporate Overview

President & CEO

쪾DaeSub Chi

Executive VP

쪾YongAm Yoon쪾HyungMo Yoon 쪾kyeHa Lee쪾SungZin Lim

Outside Director

쪾YoungChul Kim쪾KangJung Kim 쪾WonChang Lee 쪾HeonCheol Shin

Senior Vice President

쪾MoonPyo Chae 쪾JaeHo Nam 쪾NamKu Yoh 쪾YoungSoo Cha 쪾JaeHong Park 쪾JongSung Rhee 쪾HaiSun Hwang 쪾TaeHwan Kim쪾YoungChang Ko

Vice Presidnet

쪾YoungHwan Cho쪾KeeChul Shin 쪾JungIl Park쪾EuiHyeon Kim쪾HoKyung Bae쪾YounGil Kim쪾SungJun Kim 쪾SunSeol Hwang 쪾WonGwyn Jang쪾JeongCheol Kim 쪾DaeKyung Kim

Vice Presidnet

쪾HoeYong Jung 쪾TaeMyung Kwon 쪾YoungMoo Choi 쪾JongWoo Kim쪾JungBin Ko쪾YoungKap Choi쪾SeongGyu Kim쪾HoonTaek Oh쪾HagGeun Whoang쪾ByungSeok Choi 쪾YangHee Lee

Vice Presidnet

쪾SukHan Lee쪾ChoonWeon Park쪾Beom Lee쪾HyungKoo Kang쪾SangKyung Lee쪾HyunJun Jeong쪾YouSang Kim 쪾KiJae Seong쪾ByungHo Chun

* Current executives as of July 31, 2009

Auditing Diresctor

쪾GwangKi Son

CorporateDirectory

14/1501.2 Coporate DirectorySamsung Fire & Marine Insurance Annual Report 2008

Journey as a Pioneer

02

The journey of SF&MI is a living witness of the history of Korea’s insurance industry. To fulfill its responsibilities and obligations as the nation’s leading insurer and, above all,to set an example in our society, SF&MI takes a meaningful step forward every day.

★

Earned an A+ (Superior) rating from A.M. Best Company forseven consecutive years

★ Received an A+ (Stable) rating from S&P for six straight years

★ Ranked 1st in the National Customer Satisfaction Index (NCSI)for eight years in a row in 2008

★ Ranked 1st in the Non-Life Insurer category of the KoreaStandard-Service Quality Index (KS-SQI) for seven straightyears in 2008

★ Ranked 1st in the auto insurer category in the KoreaCustomer Satisfaction Index(KCSI) for 11 consecutive yearsin 2008

★ Received the Grand Prize of the Korea Service Awards for sixyears in a row in 2009

★ Received the Grand Prize of the Korea Customer SatisfactionManagement Awards for three consecutive years in 2008

★ Honored as the Best Insurance Company for the twoconsecutive years in 2008 by the Korea Insurance ConsumerFederation

★ SF&MI Chinese subsidiary obtained an A rating from S&P in2008

CorporateStory

2008 Awards

June 24“KRW 500 Gift of Hope” fund donates study room forhospitalized children

SF&MI risk consultants (RC) and sales outlets raised money and opened anew study room, named “Nuribom Class,” at a school in the HanyangUniversity Hospital for children undergoing long-term hospitalization to treatcancer and other diseases. The fund also paid for the refurbishment of thehouse of a child attending the hospital school. The study room and the homerefurbishment were the 53rd and 54th projects of the “KRW 500 Gift of Hope”fund, a voluntary initiative of RCs who seek to improve the living conditions ofpeople with disabilities.

July 17Branch opens in Suzhou, China

In an effort to strengthen sales in China, SF&MI’s Chinese subsidiaryestablished a triangular sales network linking its branches in Suzhou, Beijingand Shenzhen. The company now provides upgraded and tailored insuranceservices to Korean businesses, expatriates and foreign corporations in theHuadong region, a key center for China’s rapid economic growth.

December 16Ceremony held for donation of five guide dogs to the blind

A ceremony attended by 60 persons included SF&MI CEO DaeSub Chi, fiveblind people to receive guide dogs and volunteers who had trained the dogsfor a year. The dogs were handed over to five blind persons including Mr.

KIM Sang Joon who, despite his disability, studied social welfare in collegeand is now helping other disabled people to receive job training and stand ontheir own feet. The dogs are expected to be new and great guiding eyes indaily lives of the blind people. SF&MI is determined to continue guide dogsdonation as a vital part of the company’s social responsibility programs.

November 21FP Center opens for the first time in the industry

SF&MI became the first non-life insurance company in the country to open aFinancial Planning (FP) center. It offers a “comprehensive asset manage-ment service” and an “Financial Advisory Service” for its VIP customers and a“corporate risk-management service” to CEO customers. The center boastsa top level advisory group composed of the nation’s most renowned CFPs,lawyers, tax attorneys and real estate specialists. VIP customers are providedwith one-on-one comprehensive asset management service which goes farbeyond simple risk management. The service includes inheritance,disposition, tax-saving, possession of real property, asset allocation, financialinvestment, legal advices and etc.

Samsung anycar, the Finest Auto Insurance in Korea.

In 2002, SF&MI’s “anycar” was launched as the first branded auto insurance in Korea. It has since earned an undisputedleadership position in the industry through proactive communications with clients, and is hailed as a new, viable model ofbrand development and improvement of customer service for financial companies.

“anycar” was the first consulting-type auto insurance in Korea. It is a customized auto insurance service designed by aspecialized consulting and sales force, known as risk consultants (RC). In addition, to reinforce the leadership of thebrand, we have maintained the largest compensation network in the industry enabling the speediest settlement of claims.More than a mere insurer, we aim to be an “auto life consultant” that takes care of every aspect of car ownership andusage.

We are extending our services to bring about a full spectrum of benefits to our customers even on a global level. Forinstance, we recently signed an agreement with Farmers Insurance Group, a Los Angeles based automobile insurer, toensure that anycar’s premium customers can enjoy the same level of benefits in the U.S.

Allife- From Life to Living, All That You Need

When the line between life and property/casualty insurance has been blurred because of the diversification of saleschannels and convergence of insurance products, long-term insurance can be a key growth engine for a non-life insurer.

Allife was launched in September 2005 with an aim to strengthen our competitiveness by renewing our brand leadershipin the long-term insurance market.

Allife, a portmanteau of the words, “All, Always+Life,” means that it will cover all forms of disaster in life such as disease,accident, fire, property loss and general liability.

In other words, Allife’s inherent strength as a long-term, non-life insurance is that it insures against not only death andincurable diseases, but also minor illnesses, property damage, nursing costs, and after-retirement living costs, as well asmisfortunes that may strike parents or children in everyday life.

We introduced a new term, “living insurance,” in the industry to help our customers better understand our services whileincreasing brand recognition with the promotion of the concept, “From Life to Living.”

SF&MI’s family of brands, “anycar” is a leading automobile insurance, and “Allife”is a premier long-term insurance.

“anyhome” is a new general insurance product targeted at individual customers. This product adds to SF&MI’s well-defined hierarchy of products and brands.

Samsung Fire & Marine Insurance is taking steps toward becoming a world classfinancial services conglomerate

STRENGTHENING THE CORE COMPETENCY

Meet the demands of the rapidly evolving market and develop adif ferent iated status in areas of core competency throughstrengthening profitability in existing business areas and securing corecompetency for the future.

- Strengthen insurance competency (products, underwriting,reinsurance)

- Organize direct communication sales channel and cultivatefinancial consulting skills

- Strengthen the compliance system

DIVERSIFICATION OF BUSINESS AREAS

Leverage core competency to diversify into new markets andstrengthen overseas competency in preparation for competition withnon-financial and global players, such as banks, securities and lifeinsurance companies.

- Improve asset management

- Introduce new risk management competency (health, retirement,group)

- Strengthen global business competency

Strategies

COMPREHENSIVE FINANCIAL SERVICES COMPANY

Through differentiated competitiveness and various business areas weaim to become a total finance service company that provides acombination of high quality services to clients in the areas ofinsurance, finance and additional services

- Achieve economy of scale through mergers

- Pursue competitive multi-channel structure

- Provide total risk solutions that cater to clients’ needs

Vision Samsung Fire & Marine Insurance will strive to strengthen its core competency to secure a broad profit base anddiversify into other business areas to become a leading global corporation.

2008

January 23Seventh straight A+ (Superior) rating from A.M. Best Company

SF&MI earned the highest possible A+ rating (Superior) for the seventhconsecutive year from A.M. Best Company, one of the largest insurancerating and information agencies in the world. A.M. Best Company reviewedSF&MI’s operations thoroughly, with a special focus on our capital capacity,profit-centered strategies and risk-management capability. As a result, wereceived a “Superior”grade in financial soundness, profitability, safety andpayment capacity.

February 2English camp for the children of premium customers

SF&MI held a winter vacation English camp for the children of its premiumcustomers at the SF&MI Human Resource Training Center in Yuseong,Daejeon city. A total of 100 elementary, middle and high school studentsparticipated in the program which offered them abundant opportunities toimprove their English as they spoke only in the international languagethroughout the four-day program with native English teachers from Australia.

February 17Launch of the Internet auto insurance serviceSF&MI initiated a change in its sales practice to attract customers in their 20sand 30s by introducing a new type of auto insurance. “My anycar” autoinsurance, on sale only on the company’s Internet website, www.myanycar.com,offers 15% lower premium rates than existing “anycar” insurance. Though the

rates are lower, the Internet insurance provides the same compensationservice, emergency road service, and “anycar land” network service asexisting SF &MI products.

February 26Opening of the 4th branch of the Chinese subsidiary inQingdaoThe branch office in Qingdao is the fourth sales office of SF&MI’s subsidiaryin China, following the opening of branches in Beijing (2006), Shenzhen(2008) and Suzhou (2008). The Qingdao office will focus on sales ofcorporate insurance products that target Korean businesses and expatriates,as well as foreign corporations in the region. It also will provide high qualityand tailored insurance services as well as an upgraded and com-prehensiverisk management to our corporate customers in China. SF&MI is poised tosharpen its competitive edge in the global insurance market by implementingbusiness strategies aimed at increasing sales networks in China based onthorough market research and analysis.

April 2Singapore office opensSF&MI held a ceremony to open its office at the Samsung Hub Building onChurch Street in Singapore. The Singapore office is responsible for studyingthe insurance market in Singapore, exploring new business opportunities andpromoting partnerships with aforeign insurers and reinsurance companiesbased in Southeast Asia.

2009

HighlightsBrand StrategyVision & Strategy

Group Brand

auto insurance long-term insurance others

Independen Brand

- Economic plan

- VIP plan

- Weekend/Leisure Plan

Family Brand

Brand Modifier

- Allife Health PartnerInsurance for theElderly

- Allife TOP DriverInsurance

- Allife NewBusiness Insurance

- All kinds of long-term insurance andpension products

Coporate Brand

New Channel Products

1950sJanuary 26, 1952Founded as Anbo Fire & Marine InsuranceCo., Ltd.

1960sJanuary 31, 1963Acquired Ankuk Fire & Marine InsuranceCo., Ltd.

March 2, 1963Company name changed to Ankuk Fire &Marine Insurance Co., Ltd.

1970sJune 1, 1975Initial Public Offering

February 24, 1978Opened offices in Masan, Dongbu (east),Nambu (south)

February 4, 1979Established a risk management institute-afirst among Korean non-life insurers

1980sOctober 1, 1983Launched auto insurance division

September 1, 1985Opened office in New York (U.S.)

October 17, 1987Construction of head office building completed

May 26, 1989Increased capital to KRW8.4 billion

1990sFebruary 10, 1990Increased capital to KRW10.0 billion

March 17, 1990Increased capital to KRW 11.7 billion

April 1, 1990Opened branch in U.S.

May 29, 1990Increased capital to KRW12.8 billion

April 1, 1992Opened Seoul Customer Service Center

March 26, 1993Selected as domestic lead manager forKoreasat Insurance

November 29, 1993Opened Jakarta office (Indonesia)

2000sJanuary 30, 2000Increased capital to KRW25 billion

May 30, 2000Paid dividend on account of capital increase

April 24, 2001Opened branch in Shanghai (China)

July 1, 2001Established Samsung Traffic SafetyResearch Institute

December 31, 2001Selected as one of Asia’s “Top 200Companies” by the Far Eastern EconomicReview, a Hong Kong-based political andeconomic weekly magazine

July 10, 2008Opened Suzhou office of China subsidiary

November 20, 2008Opened the first FP Center in the industry

December 12, 2008Opened office in Singapore

2009February 26, 2009Opened Qingdao office of China subsidiary

March 3, 2009Launched Internet auto insurance service

December 6, 1993Company name changed to Samsung Fire & Marine Insurance Co., Ltd.

January 10, 1994Opened office in Tokyo (Japan)

May 9, 1994Opened Yuseong Training Center

Oct, 1994Launched Social Service Team of SF&MI

April 20, 1995Opened Beijing office (China)

July 15, 1995Opened office in Ho Chi Minh City (Vietnam)

August 28, 1996Opened office in Hanoi (Vietnam)

September 20, 1996Opened office in Shanghai (China)

November 7, 1996Established a local subsidiary in Indonesia

April 4, 1998Increased capital to KRW 14.8 billion

October 15, 1998Established Samsung Fire & MarineInsurance Claim Adjustment Service Co., Ltd.

January 19, 1999Increased capital to KRW 20.0 billion

July 3, 1999Stock split to KRW500 per value

January 18, 2002Declared 2002 as the first year for “SamsungFire & Marine Insurance Ethical Management”

January 26, 2002Unveiled time capsule in commemoration of the50th anniversary of the company

April 2, 2002Launched Samsung “anycar” auto insurancebrand

April 26, 2002Won the “Most Respected property/casualtyInsurer Award” at “The First in Korea” awardssponsored by Korea Minting and SecurityPrinting Corporation

November 14, 2002Established “Samsung Vina Insurance CompanyLimited (SVIC)” as a local subsidiary in Vietnam

March 26, 2003Selected as the “fairest trader” by KoreaFair Trade Commission

May 26, 2003Opened office in Qingdao (China)

December 10, 2003Launched Samsung Super Insurance, theindustry’s first integrated insurance product

December 30, 2003Signed an MOU for Cooperation andExchange with China Price InformationNetwork, a Chinese insurer

August 19, 2004Introduced “Socially Contributing Brand” a first in the industry

August 19, 2004Changing its name into “Samsung AnycarSocial Service Team”

January 3, 2005Opened Samsung Loss Control Center,the first of its kind in the history of theprivate sector

April 25, 2005Established Samsung Fire & MarineInsurance (China), the first local subsidiaryestablished by a foreign insurer in China

July 22, 2005Opened office in London (U.K.)

September 30, 2005Launched “Allife” as a flagship brand forlong-term insurance

February 27, 2006Renewed the 2006 Samsung anycarVolunteer Group

April 4, 2006Introduced the slogan “Living Insurance” inlong-term insurance

July 27, 2006Opened Beijing office of China subsidiary

November 27, 2006Unveiled the Metro Pole 50, a neon sculpture

November 29, 2006Won “Presidential Award” at “Korea BrandAwards”

December 12, 2006Received “Presidential Citation” at the Firstand Foremost Movement for Persons withDisabilities Awards

December 20, 2006Won “Presidential Award” at the “DigitalKnowledge Management Awards”

January 9, 2007Samsung Traffic Safety Research Institute(STSRI) received “Samsung Award of Honor”

January 18, 2007Named an “Asian Fab 50” company in theAsia Pacific Region by Forbes

February 21, 2007Opened Railroad Wing at the SamsungTransportation Museum

December 21, 2007Opened Shenzhen office of China branch

Corporate Historysee the widest 촻

SF&MI’s philosophy is embedded in all of the company’s insurance products-a principlethat customers are our first priority in any case and a promise to deliver top-level servicethat surpasses anything our competitors offer

PioneeringPhilosophy

03

Review of Operation

1 AUTOMOBILE INSURANCE2 LONG-TERM INSURANCE3 COMMERCIAL INSURANCE4 ENTERPRISE RISK MANAGEMENT

2,760.4

3,112.3

Direct Premiums(In billions of Korean Won)

FY2008FY2007

FY2006

SF&MI, with its “anycar”auto insurance brand, is the one and onlyfinancial company in Korea ranked first in the Korean Customer SatisfactionIndex (KCSI) for 11 straight years.

28.0%

Market Share :

MoonSeog So I Senior Manager

Review of Operation

3,060.5

FY2006

Auto insurance market in 2008 and SF&M’sstrategies and results

Undeterred by rapidly changing market conditions such asthe diversification of sales channels, we maintained a healthymarket share of 28.0% in the auto insurance industry in fiscal2008. With a 2% growth in the market share of online autoinsurance from 16.4% in 2007 to 18.4% in 2008, SF&MIentered the market with its own online auto insurance servicein March 2009. This will enable us to build a strongerpresence in the online market in the future.

In an effort to strengthen our profit structure, we introducedmodel-specific rates and profit-oriented pricing policies,which resulted in a loss rate of 67.2% in 2008.

Implement pricing policy reflecting actual cost

In the face of rapid growth of the online insurance market, wedid not take refuge in price competition. Rather, we havemaintained a pricing policy that reflects the actual costs indelivering quality products and services to customers.Premiums are determined by the risk factors of eachcustomer to ensure fairness for all customers while a positiveand advanced underwrit ing (U/W) system has beenstrengthened.

Strenghten competitiveness through productdifferentiation

We have a wide range of differentiated products that enableus to strengthen sales competitiveness and introduceproducts tailored to each customer. For example, our anycarFamily Service, launched in August 2008 to provide freemaintenance and repairs at auto service centers associatedwith SF&MI, was hailed by our customers. Such innovationhas led anycar to top the Korean Customer SatisfactionIndex (KCSI) for 11straight years, the only brand of a financialcompany to do so.

Reinforce car accident prevention programs

Recognizing our social responsibility to seek a reduction incar accidents, the Samsung Traffic Safety Research Institute(STSRI) was founded in July 2001. In 2008 alone, theorganization implemented a total of 148 publicity programs.

In addition, since 2006, we have produced and airedprograms introducing the best road traffic safety practices inother countries in partnership with a major TV station inKorea.

We also provide road safety training to 12,000 mothers ofprimary school students every year. As “honorary road safetyteachers,” the parents ensure the safety of their children onthe way to and from school. To support the road safetyinitiatives of local authorities, we conduct safety assessmentsof roads in medium- and small-sized cities as well as ofroads in downtown areas.

The business outlook for 2009, strategies and plans

With the growth of the online auto insurance market, SF&MIbegan its own online auto insurance service in March 2009.This service, along with our already strong face-to-face saleschannels, is expected to solidify the company’s leadingposition in the market.

We will continue to focus on profitability that reflecting theloss ratio and costs of doing business in our pricing. Thus wewill maintain realistic pricing and refrain from aggressive pricecompetition, while offering high quality products and servicesthat cover actual costs. This will enable us to build a stableand sustained profit-loss structure.

We also upgraded the insurance terms of use with expressionsthat are more easily understood by our customers, and willintroduce more products differentiated and catering to thevarious needs of customers. In addition, in the event that anyof our policyholders move to the U.S., we are working tohave their accident-free records recognized by U.S. insurers.In doing so, we will make anycar the most trusted autoinsurance among sales forces as well as customers.

In the last year, the STSRI increased the number of TVprograms about traffic safety practices in foreign countries toraise awareness of road safety and encourage thegovernment to invest more in relevant infrastructure.

We will continue our efforts to increase the profitability of autoinsurance while remaining true to our quest for excellence asa leading company in the industry.

SF&MI, with its “anycar” auto insurance brand, is the one and only financialcompany in Korea ranked first in the Korean Customer Satisfaction Index (KCSI) for11 straight years.

20/2103.1 Automobile InsuranceSamsung Fire & Marine Insurance Annual Report 2008

4,545.9

5,089.6

5,576.8


FY2008FY2007

FY2006

insurance market by developing

products and underwriting policies in

a systematic and strategic manner.

Despite the

unfavorable market

conditions, SF&MI

realized sustained growth

in the

27.9%Market Share :

long-term

HyoEun Jang I Associate

Review of Operation

Long-term insurance market in 2008 and SF&MI’sstrategies and results

Since the global financial crisis began in 2008, there hasbeen possibility of a prolonged economic downturn andfinancial market volatility. The implementation of the CapitalMarket Consolidation Act is expected to break down barriersbetween business areas of financial companies and intensifycompetition in the industry. The insurance industry isundergoing a number of changes in its managementenvironment, including the crossselling of life and non-lifeproducts, the implementation of long-term nursing insurancefor the elderly as well as diversification of sales channelssuch as bancassurance, GA and mail order.

Maintain leadership in the market through sustainedgrowth based on strong profitability

Despite the unfavorable market conditions, SF&MI realizedsustained growth in the longterm insurance market bydeveloping products and underwri t ing pol ic ies in asystematic and strategic manner. At the same time, we havesecured profitability through sophisticated risk and profit/lossmanagement. To cope with the rapidly changing environmentin the financial market, we have sought new growth enginesthat can maximize customer values and provide the mostsuitable products for each sales channel with an aim toachieve balanced growth of all sales channels.

Enhance and leverage core competencies of long-term products

The long-term insurance of SF&MI is an important source ofcurrent and future revenue. Therefore, we have strengthenedefforts to stand tall in this field by developing new products,improving underwriting skills, optimizing our product portfolioand enhancing our compliance system. We also establisheda scientific and systematic statistical system to maintainproper risk rate, and a policy-renewal system to increasevalue for our customers and shareholders.

Strengthen strategies to deal with sales channeldiversification

We are focusing on developing products with an ideal fit foreach sales channel and differentiating sales strategies inresponse to the diversification of sales channels-for example,cross-selling of life and non-life products, GA and mail order.

We are committed to providing distinct products to eachcustomer and sales channel through a careful analysis of thecompetitiveness of each sales channel and the intensity ofcompetition in the market.

2009 outlook, strategies and plans

It appears that the economic downturn caused by the globalfinancial crisis will continue into this year. In the insuranceindustry, small and medium insurers are expected to addprice competition to the market with low-premium productsand rate cuts through diversified sales channels such asbancassurance, GA and mail order. Furthermore, the industryis bracing for a series of changes in the regulation of thepayment of medical costs borne by policy holders and theprovision of detailed product information.

Given this background, we will put in place long-terminsurance sales strategies that seek to sustain M/S growthbased on a stable profit/loss structure. We will analyzecustomers’ needs thoroughly, and develop and provideproducts from their viewpoints. We will develop products andmarketing methods that fully reflect the needs and purchasepatterns of our customers. In doing so, we will provideproducts that are highly responsive to the changing needs ofour customers and the market while maintaining our marketleadership.

We will be creative as we venture into new marketplaces,and develop innovative products and services. We also willconduct more precise and systematic analysis of risk rates toimprove our cost competitiveness.

Long-term insurance plays a key role in ensuring the company’s revenues andfuture profitability. Systematic and strategic product development paves the wayfor steady and long-term growth of our insurance business.

22/2303.2 Long-term insuranceSamsung Fire & Marine Insurance Annual Report 2008

29.3%

Operating profit from

KRW 40.3 billion over the

year to KRW 151.9 billion,

not with standing falling

premium rates in the

reinsurance market,

steep hikes in foreign

exchange rates and

a subsequent increase

in foreign currency O/S

commercialinsurance surged by

Market Share:

SeonGeel Seo I Manager

936.2

958.71,107.6


FY2008FY2007

FY2006

Review of Operation

Commercial insurance market in 2008 and SF&MI’sstrategies and results

In fiscal 2008, revenue from commercial insurance reachedKRW1,107.6 billion, up 15.5% from the previous year.Operating profit surged by KRW40.3 billion over the year toKRW151.9 billion, notwithstanding falling premium rates inthe reinsurance market, steep hikes in foreign exchangerates and a subsequent increase in foreign currency O/S.

Such results are all the more remarkable given that one ofour rival companies posted an operating profit of negativeKRW118.1 billion. Our fine results can be attributed toSF&MI’s thorough risk analysis, strong managementcapacity, and retention of profitable policies.

To this end, we continued with professional training and riskanalysis to bolster our consulting-type sales, adopted in2007, in pursuit of service differentiation and competitiveadvantage. Innovations in management practices wererealized in scientific risk analysis, in the use of scientific andstat ist ical databases in decision-making and in theenhancement of infrastructure.

As for our overseas operations, we opened offices inQingdao in February 2009 under the direction of our Chinesesubsidiary and in Singapore in March 2009 to expand oursales and service portfolio in Asia. Built on the accom-plishments, we are moving forward so as to stand shoulder-to-shoulder with other top-notch insurers in the globalmarketplace.

2009 outlook, strategies and plans

It appears that another bumpy year lies ahead for commercialinsurance, as there are tantalizing signs of recovery in the realeconomy, and fears of another credit crunch linger inf inancial markets. However, based on SF&M’s pastexperience in overcoming difficulties, we will strive to sustainstable growth this year.

In recognition of the need for new growth engines andfundamental improvements in underwriting to cope withchallenges in the domestic market, we are set to driveforward with massive innovation focused on extending oursales reach from small-and mediumsized enterprises andindividuals to big business, reinforcing overseas operations,and strengthening underwriting capacity.

To expand our customer base, we will target “small in valuebut large in number” contracts with the launch of the firstproduct targeting the segment in July 2009. As for ouroverseas operations, we opened an office in India in May,and offices in Qingdao, China and Singapore earlier this year,after the necessary approvals were obtained. In the latter halfof this year, we will open an office in Brazil to expand thesales and services for commercial insurance overseas as away to strengthen the company’s new growth engine.

With a goal of developing a risk analysis capacity forunderwriting that is equal to that of leading foreign insurers,we are making considerable innovations to strengthenanalysis according to risk level, develop specialized areas ofunderwriting, create distinct pricing strategies and improveour ability in the calculation of rates. We will exert an all-outeffort to build our capacity for global competitiveness so asto take advantage of a diversified source of profits and tostrengthen our leadership in the market.

In commercial insurance, SF&MI is on the global frontier of efforts to build capacity to meet global standards and innovate management practices to strengthen serviceplatforms.

24/2503.3 Commercial InsuranceSamsung Fire & Marine Insurance Annual Report 2008

risk-related

Our Enterprise RiskManagement Committee isresponsible for addressingrisk and controlling for

issues in a timelyand appropriate manner.

Ross Ratio 76.6%Expense Ratio 23.0%

Underwriting Efficiency99.6%

Underwriting Efficiency(%)

Dedicated to identifying, assessing andmanaging potential threats

Ross Ratioa

Expense Ratio

Review of Operation

YeunJi Jung I Associate

FY 2007

FY 2008

21.7

78.1

99.8

23.0

76.6

99.6

Being a financial institution, active risk management is one ofthe crucial processes and core competencies of SF&MI.Managing risk is not just about avoiding or even minimizing it.Risk also needs to be considered as a potential opportunity.The ERM department manages the overall risk profile, aimingfor a good balance between risk and return.

SF&MI uses the Enterprise Risk Management (ERM) system,which has two functions: to ensure financial stability throughcontrolled risk-taking and to provide for adequate capitalizationthrough a broad range of risk analyses.

SF&MI's Enterprise Risk Management Principles

At SF&MI, Enterprise Risk Management (ERM) is based onthree principles that are applied throughout the company.

Early Warning Risk Identification:This involves risk management and analyses using projections for thefuture and requiring risk management forecasts and prognostications. KeyRisk Indicators (KRIs) allow SF&MI's risk managers to evaluate risk inadvance using real data.

Independent Risk Management Function:This is a specialized SF&MI department that is charged with managingpotential conflicts of interest.

Value-based Management Support:Embedded Value (EV) appraisals and the reporting of same enable SF&MIto practice Value-based Management (VBM) and measure the economicvalue of SF&MI's overall insurance operations.

Enterprise Risk Management Organization andStructure

The Board of Directors is responsible for establishing theframework, principles, and guidelines for Enterprise RiskManagement (ERM) at SF&MI. The Enterpr ise RiskManagement Committee is responsible for addressing riskand controll ing for risk-related issues in a timely andappropriate manner. The Chief Risk Officer (CRO) takesprimary responsibility for SF&MI’s risk management and hastwo staff departments, the Actuarial Department and ERMDepartment, which oversee Strategic Risk Planning, RiskControl, and Model Validation.

SF&MI’s Enterprise Risk Management Department monitorsrisk through analyses, reports, and risk modeling and istasked with identifying a wide range of possible risk scenariosin the company’s business units as well as company-wide. Byapplying these processes, the department assesses andmonitors each risk scenario, and implements appropriateaction plans.

Risk CategoriesThe major risks that SF&MI faces are as follows.

Asset-Liability Management (ALM) Risk:ALM manages structural risks (i.e., interest rate, equity, and liquidity) from

the perspective of optimized returns. Managing for ALM Risk involvesstrategizing from the dual viewpoints of assets and liabilities. StrategicAsset Allocation (SAA) involves the optimization of asset structures, whilethe Product Mix Strategy is concerned with the optimization of liabilitystructures.

Insurance Risk (Underwriting Risk): Insurance Risk refers to the danger of incurring a financial loss due toproperty, casualty, auto, or long-term insurance events. Our EnterpriseRisk Management Department manages for the transfer of such risks-including setting limits on underwriting authorizations and requiringapprovals for transactions involving new products. It also oversees themanagement of reinsurance and monitors emerging issues that may affectthe company’s overall exposure to risk.

Market Risk:Market Risk refers to the danger of being negatively impacted bymovements in financial markets-including equity market prices, creditspreads, foreign exchange rates, and real estate prices. Through scenario& sensitivity analysis, SF&MI measures the potential changes in expectedearnings based on an instantaneous increase/decrease in financial marketfactors.

Credit Risk:Credit Risk refers to the danger of incurring a financial loss due to thediminished credit-worthiness of counter-parties of SF&MI and/or thirdparties. To help mitigate the possibility of such occurrences, SF&MItransfers a portion of its new business to authorized reinsurers that arerated at least “A-.” For its investment portfolios, SF&MI maintains a well-diversified credit fixed-income portfolio across companies and industries.

Regulatory Perspective

SF&MI is engaged in the Risk Assessment & ApplicationSystem (RAAS) and in preparing for the introduction of theRisk-Based Capital (RBC) System, both of which arestatutory requirements of the Korean Financial SupervisoryService.

Strategic Risk Management Decision-Making

SF&M’s strategic decision-making is made by quanti-tative/qualitative analysis. Enterprise Risk Managementinvolves the company’s future earnings projection, NPV, IRR,and Capital collection periods using quantitative analysis.SWOT analysis and reputation/compliance risk assessmentsare also used to aid in the company’s strategic decision-making.

Strategic decisions are made by management committees orby the Board of Directors. Risk management analysis is oneof the major tools for strategic decision-making, in terms ofnot only the financial impact, but also reputation/compliancerisk reviews.

Strategic acquisitions, if necessary, will be made throughvaluations by actuarial and risk management concepts inaccordance with regional regulations.

26/2703.4 Enterprise Risk ManagementSamsung Fire & Marine Insurance Annual Report 2008

Sustainability Management1 ETHICAL & ENVIRONMENTAL MANAGEMENT2 CORPORATE COMMUNITY RELATIONS3 SPORTS4 CULTURE

Strong financial soundness, profitability, safety and payment capability are not the only elementsthat make SF&MI the finest insurance company in Korea. We are not only socially responsible,but also committed to making the world a better place to live for everyone.

PioneeringAction

04

Sustainability Management

By balancing our social,environmental andeconomic needs, SF&MI is striving totake greater responsibilityfor our environment andwork towards creating a cleaner future.

Ethical &Environmental

Management

Ethical Management

In 2002, SF&MI declared the year as a threshold year forethical management. The principles of SF&MI’s ethicalmanagement were set as 3Cs representing “Clean, Change,and Challenge.” Furthermore, key objectives of our code ofethics include “transparent managemen” trusted by thepeople, “fair trade” in respect of fair and free marketcompetition, and a “clean organizational culture” that fightscorruption.

With a strong belief and confidence in the value offered byinsurance, we have improved our sales practices to offermore detailed explanations of a product while providing moreaccurate compensation to the greater satisfaction of ourcustomers. In 2009, we adopted a code of conduct aimedat improving “customer orientation,” “a sense of ownership,”“a spirit of challenge,” “professionalism,” and “compliancewith laws.” We have also strengthened our commitment toethical management through in-company broadcasting andcampaign leaflets. In addition, every year all employees sign awritten oath to uphold the principles of ethical management.

SF&MI-from the CEO to entry-level employee- is clearlyaware that ethical management is not merely a matter ofchoice, but an obligation. We reiterated our dedication tosustainable ethical management practices at the 2007B.E.S.T (Business Ethics are the Source of Top Per-formance) Forum Seminar on March 7, 2007, jointly hostedby the B.E.S.T. Forum and the Institute for Industrial PolicyStudies and signed the forum’s CEO pledge.In 2001, we proclaimed our adherence to the principles andpractices of fair trade for the first time as a non-life insurer inthe country. Since then, we have developed a “ComplianceProgram” to translate our pledges into actions.

In 2005, we established an Internal Trade Commission,whose membership is l imited to outside directors, toexpedite transparent management. In 2009, we also foundeda Compliance Consulting Center to provide all employeeswith guidance on fair trade whenever needed. In addition, weenforce Jeongdo Jikimi, a whistleblower program, whichallows for anonymous reporting of non-compliance withguidelines or rules within the company. At the same time, theprogram places more emphasis on prevent ion thanpunishment. We also run an ethical management training

course for all employees throughout the year to sharelessons learned from whistle blowing cases, and best andworst practices for ethical management.

Environmental ManagementClimate change and environmental destruction is alreadyaffecting our lives and the places we live, and has thepotent ia l to dramatical ly impact the l ives of futuregenerat ions. SF&MI is committed to protect ing theenvironment, both as a responsible insurer and as anenvironmentally responsible corporation.

Green Bicycle InsuranceOn June 2009, SF&MI launched its 'green bicycle insurance',a bancassurance product that was jointly developed withKookmin Bank. In Korea, this is the first bicycle insurancethat provides personal and third-party liability protectionagainst the costs of damage or injury to other people orvehicles. This product is in line with ‘Low Carbon, GreenGrowth’, the core of the Korean government's new visionand helps reduce greenhouse gas emission andenvironmental pollution. In addition, it also meets the growingneeds of more than 8 million bicycle owners in Korea, whowere without such accident protection before this productlaunched.

Eco-OfficeIn order to become more environmentally friendly and cutdown paper use, SF&MI initiated a company-wide programto decrease the paper usage by 10%. From March 2009, wesuccessfully reduced 37 printers and 49 fax machines fromthe headquarters and decreased paper cup waste bypromoting the use of individual mugs. In addition, from July2009, SF&MI started reducing the energy expenditure on ourcomputers by setting the computer to go into standby modeif it has been inactive for 10 minutes.

Pollution Liability InsuranceSF&MI is helping conserve our nature with our pollutionliability insurance. This insurance product not only providesfinancial protection for damages caused by pollutionincidents, but also prevents the spread and facilitates theclean-up of the environmental hazard.

30/3104.1 Ethical & Environmental ManagementSamsung Fire & Marine Insurance Annual Report 2008


BoYoon Kook I Assistant

SF&MI is committed tocontributing to thecommunity to realizethe “management ofsharing” for a betterworld.

CorporateCommunity

Relations

SF&MI, since creating a volunteer group in 1994, has beenengaged in a number of community service activities, with aspecial focus on traffic safety and support for persons withdisabilities because they are closely linked to the nature ofour business. All employees and RCs (Risk Consultant) ofSF&MI have act ively part ic ipated in the company’scommunity service initiatives through volunteering anddonations.

Traffic Safety Promotion Initiatives

We selected Traffic Safety as our focus of attention and haveendeavored to prevent the occurrence of car accidentsinvolving children and raise awareness of accident preventionwhile initiating a wide range of road safety training programsand campaigns through the Samsung Traff ic SafetyResearch Institute (STSRI) and the Samsung TransportationMuseum. In addition, to a total of 102 children of trafficaccident victims including traffic police officers, we providesuch assistance as support in covering living costs, collegeentrance scholarships, graduation gifts, private tutoring aswell as emotional support by connecting each child with apart icular division of the company. In part icular, weintroduced a “Creating a Safer World Car Insurance” in July2007 to raise funds that go towards the “Health Voucher”initiative which provides about KRW300,000 worth ofmedicine per year to each child of traffic accident victims incoll-aboration with the Korean Pharmaceutical Association.

Support for Persons with Disabilities

We also provide an array of programs for persons withdisabilities such as donation of guide dogs for the blind,support for talented students with disabilities, assistance fora successful reintegration of the people into society, andincrease public awareness regarding people with disabilities.We have also donated a total of 126 specially trained guidedogs to the blind since 1995. The dogs are donated twice ayear after being trained at the Samsung Guide Dog School.With this, we are making a variety of efforts to increasepublic acceptance of the dogs in public areas and transitsystems.

In addit ion, we run “Talent Camp for Students withDisabilities” to provide systematic and professional educationto students who are gifted with musical talent. We also haveoffered the “SF&MI Scholarship” to visually challengedstudents and joined forces with a volunteer group, “First andForemost Movement for Persons with Disabilities” to helpvisually-impaired and wheelchair-bound persons successfullyreintegrate into society. In 2008, we signed a “SocialAgreement to Raise Public Awareness of Disability” with theMinistry of Education, Science and Technology and the Firstand Foremost Movement for Persons with Disabilities andaccordingly produced and distributed a campaign film “MyFriends” to 3,000 middle schools across the country.

Volunteering of SF&MI Employees

To better serve our community as a good corporate citizen,we formed the “Samsung anycar Volunteer Group” underwhich 180 sub-groups are actively engaged in communityservices across the nation. In 2008 alone, each employeeparticipated in volunteering for an average of 6.2 times or20.2 hours. Employees also raise KRW400 million a year inthe name of the Dream Fund. The company then matchesthese donations, which are used to lend a helping hand toneighbors in need. Since August 2005, we have set uppartnerships with 105 rural communities, in which each ofour divisions is partnered with one of them. Employees areencouraged to visit and purchase agricultural products at thelocal village partnered with their division.

KRW500 Gift of Hope

At the same time, SF&MI risk consultants (RC) have raised a“KRW500 Gift of Hope” fund by donating KRW500 per long-term insurance contract signed since May 2005. The fund isused to refurbish kitchens, restrooms, washstands, studyrooms, etc. at homes and facilities of the disabled to improvefunctionality and convenience for the residents of saidfacilities. So far, as many as 20,000 RCs have joined thecampaign to raise KRW1.36 billion and bring new hope to 67families of the disabled and 11 facilities. SF&MI is committedto contributing to the community to realize the “managementof sharing” for a better world.

32/3304.2 Corporate Community RelationsSamsung Fire & Marine Insurance Annual Report 2008


The passion of SF&MIstands out in sports. We progress and innovatefurther every year.

Sports

Samsung Fire & Marine Insurance BluefangsVolleyball Club

Since its launch in 1995, this volleyball club has made asensational debut by winning the title of the 2nd Korea GrandVolleyball League in 1996. The next year, the Korea VolleyballSuper League was created and the Samsung Fire & MarineInsurance Bluefangs won the title, too. The volleyball teamhas since swept the top spots in a number of series inKorea.

The triumphant march of the Bluefangs reflects the passionof SF&MI. In 2008, the club won the grand title of the nation’svolleyball leagues. The Bluefangs volleyball club is in full gearto win the 2009-2010 volleyball leagues with its new pioneerspirit. The team will bring fans lots of joy and excitementthrough well-mannered and thrilling games in the nextseason.

The 14th Samsung Cup World Baduk Masters1

The Samsung Cup World Baduk Masters , which marks its14th year in 2009, has upgraded the rules and prizes underthe slogan of “Change and Innovation - the Samsung CupEvolves.” “The Samsung Cup World Baduk Masters” refersto a traditional Korean board game also known as “Go”.

In the previous competitions, players from Korea, China andJapan constituted the majority of the participants. This year,however, players from Southeast Asia, Europe, and Americaare also invited. Therefore, the international reputation of theSamsung Cup is expected to be strengthened significantly.

As a result, for the first time in the competition’s history, thetop players from 10 countries including Singapore, Thailand,

Canada, France, Germany, the Netherlands, Hungary,Romania, Russia, and the Czech Republic will come toKorea to compete for the title.

Besides participating in the world’s largest “The SamsungCup World Baduk Masters” “championship, the players willbe given chances to have goodwill matches with KoreanBaduk clubs. The events are designed to offer opportunitiesfor the players to experience the excellence of Korean Badukand to raise awareness of it in countries of the players.

In the previous competitions, each country had the right torecommend their seed players. This year, however, only thewinners of major championships are invited so as to ensurethat the world’s top players join the games.

The rules of finals have also changed significantly. Instead ofa knockout tournament where defeated players in eachmatch are eliminated, double elimination2 will be applied forthe top 32 players. The format, which was used in the WorldBaseball Classic (WBC), aims to give another chance tolosers, reduce unexpectedness, and add more thrills to eachmatch.

In addition, a “Senior’s Group” was created for pros over 45years old. Online preliminaries are also adopted so thatamateur players can participate in the Samsung Cup moreeasily.

A Children’s Baduk competition will also be held on thesidelines of the Samsung Cup. Young Baduk playersadvancing to finals will have their matches in the place wherethe quarter-finals of the Samsung Cup are held and will beallowed to watch the games in person.

34/3504.3 SportsSamsung Fire & Marine Insurance Annual Report 2008

1) Masters competition:Competitions to which the winners and top players in major championships are invited.

2) Double elimination:A type of tournament where a player is eliminated upon losing two games. However, if the player loses one game and wins the other two, s/he will be eligibleto advance to the next round.


YeonHee Shin I Financal Specialist Ⅲ

SF&MI is committed toproviding valuable learningand special enjoyment byresearching automobileculture while contributing tothe advancement of thecountry’s traffic safetypractices.

Culture

Samsung Traffic Safety Research Institute (STSRI)

The Samsung Traffic Safety Research Institute (STSRI) wasestablished in July 2001 with 15 Ph.D. holders in tran-sportation safety. One hundred years have passed since thefirst car appeared on the street in the country and thenumber of registered cars now exceeds 14 million. Theinstitute was founded to improve driving and traffic practicesin Korea, which still records the highest death rate in caraccidents.

The STSRI has actively partnered with government agenciesand civic groups to pursue joint projects, improve road safetyregulations, propose relevant laws, and etc.

The institute is also committed to conducting research onICT development for road safety, theft-prevention systems,car safety systems and automobile product liability.

Samsung Loss Control Center

SF&MI formed a specialized organization for risk manage-ment in 1979 for the first time among domestic non-lifeinsurers. Since then, it has provided risk-managementservices for accident prevention to create disaster-freeworkplaces for our customers.

The specialists at our Loss Control Center have rich practicaland theoretical experience in the fields of construction, civilengineering, machinery, electronics, chemical engineeringand others. They have exerted their best efforts to safeguardour customers from accidents by developing new risk-prevention skills for highly industrialized fields, establishingpractical accident-prevention methods, holding seminars andpublishing reports.

Samsung Transportation Museum

The Samsung Transportation Museum, The SF&MI Tran-sportation Museum, the only automobile museum in Korea,aims to introduce the history and spirit of automobiles, andthus promote automobile culture that can be widely sharedby the public. Since the museum’s establishment in May1998, about 300,000 people visit there every year.

The transportation museum is playing three roles as below:

Social education on automobile cultureThe museum has collected, studied and preserved a widevariety of artifacts related to automobiles. It also has exhibitedits collections, run training programs and published books tofulfill the public desire to know more about automobileculture.

Preserve and promote the heritage of automobile cultureThe museum has preserved automobile-related artifacts in anoptimized environment and restored damaged ones, passingthis heritage down to our descendants.

Create and promote a new automobile cultureThe museum has introduced and explored automobileculture in all its forms and related information in an effort toprovide the public with opportunities to experience it whilecreating and promoting a new and better automobile culturein Korea.

36/3704.4 CultureSamsung Fire & Marine Insurance Annual Report 2008

SF&MI is robust. We are reliable. We never fall into complacency, and we are runningwell ahead of anyone else. Our customers are the beginning and end of our business.We will dedicate our efforts to creating stronger corporate values for many years tocome.

Table of aPioneeringCompany

05

Financial Section

1 MD&A2 FINANCIAL STATEMENTS3 WORLDWIDE NETWORK & SAMSUNG AFFILIATES

MANAGEMENT DISCUSSION & ANALYSIS

A. Operational Results

1. Overview

In fiscal 2008, the global economic meltdown ravaged the world economy. On the international front, the global financial market and the real

economy felt the squeeze of the credit crunch in the U.S. Meanwhile, on the domestic front, the economy was plagued by such woes as a

slackening of exports, weak consumption, sagging employment, and volatile currency and stock market swings.

The domestic non-life insurance industry was also marked by intense competition as sales channels were diversified with the implementation

of cross-selling of life and nonlife products and the growth of GA channels and the online auto insurance market. Despite the unfavorable

circumstances in and out of the country, SF&M made good progress as follows:

First, we posted a record-high net profit for the fiscal year. Net profit totaled KRW598.7 billion, which was second to none in the industry. In

so doing, we set a record of paying dividends to our shareholders for 33 years in a row, ever since the company’s listing on the stock

market in 1975. In addition, return on equity (ROE) rose 2.1%p to 16.5%, dwarfing that of major foreign insurers.

Second, tangible progress was made in strengthening SF&MI’s fundamental competitiveness. Auto insurance stemmed persistent losses by

achieving a combined ratio of 98.3%. Such improvements in the company’s efficiency contributed considerably to the growth in profit. In

long-term insurance, the loss ratio remained stable as the share of living benefit type coverage in product lines were kept to appropriate

levels. Despite the challenging investment environment, net investment yield was up 0.1%p from the previous year to 4.9% as a result of

focused efforts to improve the existing profit structure and extend debt-asset spreads through a preemptive high-yield bond investment.

Third, we realized the strongest financial soundness in the industry. SF&MI recorded the lowest non-performing loan ratio and delinquency

ratio in the industry. The solvency margin ratio, one of the major barometers of financial robustness, was 374.8% at the end of March,

showing a striking gap with other players in the market whose capital strength was undermined by losses from risky assets.

In addition, direct premiums written were up 6.4% year-on-year to KRW9,744.9 billion, net profit climbed by 25.6% to KRW598.7 billion, and

adjusted net profit including an increase in catastrophe reserves jumped 27.2% to KRW671.3 billion. Total assets grew 11.3% to

KRW23,092.2 billion while catastrophe reserves increased 7.4% to KRW1,059.3billion, thus enhancing the company’s already strong

financial stability.

Financial Section

2. Profit and Loss Summary

In fiscal 2008, direct premiums written and net premiums earned posted 6.4% and 7.9% year-on-year growth, or KRW9,744.9 billion and

KRW8,992.6 billion, respectively.

Increase in catastrophe reserves surged 41.5% from the previous year to KRW72.6 billion. Underwriting losses shrank KRW18.1 billion to

negative KRW31.8 billion owing to a significant improvement in the auto insurance loss ratio. Investment operations posted KRW887.6 billion

in profits, up KRW114.9 billion from a year earlier.

All in all, operating profit expanded by KRW133.1billion or 18.4% year-on-year to KRW855.9 billion. Non-operating profit improved by

KRW27.3 billion to negative KRW35.1 billion. In other words, pre-tax profit soared by KRW160.4 billion to KRW820.8 billion and net profit

grew KRW122.2 billion or 25.6% from the previous year to KRW598.7 billion. Adjusted net profit including catastrophe reserves was up

KRW143.5 billion to KRW671.3 billion. Adjusted EPS based on adjusted net profit increased 31.2% to KRW15,408.

40/4105.1 Management Discussion & AnalysisSamsung Fire & Marine Insurance Annual Report 2008

Income Statement Summary Korea Won / in billions

WonFY08Change

%FY07

Direct Premiums Written 9,744.9 9,160.6 584.3 6.4%

Net Premiums Earned 8,992.6 8,336.5 656.1 7.9%

Increase in Catastrophe Reserves 72.6 51.3 21.3 41.5%

Underwriting Profit -31.8 -49.9 18.1 N/A

Investment Profit 887.6 772.7 114.9 14.9%

Operating Profit 855.9 722.8 133.1 18.4%

Non-Operating Profit -35.1 -62.4 27.3 N/A

Pre-tax Profit 820.8 660.4 160.4 24.3%

Net Profit 598.7 476.5 122.2 25.6%

Adjusted Net Profit 671.3 527.8 143.5 27.2%

Adjusted EPS (In KRW) 15,408 11,742 3,666.5 31.2%


3. Earnings by Product Line

When it comes to the sales growth of product lines in fiscal 2008, general insurance recorded the biggest gain followed by long-term

insurance and auto insurance.

General insurance, which grew the most among the product lines, showed a 15.5% increase in sales mainly due to a growth in sales of hull

insurance.

Sales of long-term insurance reached KRW5,576.8 billion, up 9.6% from a year before. Initial premiums recorded a healthy 19.9% climb to

KRW195.4 billion as a result of focused efforts to launch innovative products, boost the productivity of solicitors’ channels, and increase the

number of high-performing solicitors on the heels of an overhaul of product and solicitors’ channels in the last year.

Auto insurance sales fell 1.7% compared to last year to KRW3,060.5 billion because of cuts in premium rates and new car registrations.

Our market share was slightly down by 1.1%p to 28.0% from a year earlier. By product line, our control of the auto insurance market was

weakened by the expansion of the online insurance market and a decrease in new contracts while market share in general insurance and

long-term insurance dropped slightly as we focused on improving the profitability of sales.

Financial Section

Direct Premiums Written by Line

Market Share by Line

General 1,107.6 11.4% 958.7 10.5% 148.9 15.5%

Long-term 5,576.8 57.2% 5,089.6 55.6% 487.2 9.6%

Initial Premiums 195.4 2.0% 163.0 1.8% 32.4 19.9%

Renewal Premiums 5,381.4 55.2% 4,926.6 53.8% 454.8 9.2%

Automobile 3,060.5 31.4% 3,112.3 34.0% -51.8 -1.7%

Total 9,744.9 100.0% 9,160.6 100.0% 584.3 6.4%

Korea Won / in billions

AmountFY08

% AmountFY07

% AmountChange

%

General 29.3% 28.2% 29.1% 1.1%p

Long-term 27.9% 29.7% 31.9% -1.8%p

Automobile 28.0% 28.8% 28.6% -0.8%p

Total 28.0% 29.1% 30.2% -1.1%p

FY08 Change %FY07 FY06

The loss ratio slipped 1.5%p to 76.6% in fiscal 2008. By product lines, the loss ratio in auto insurance showed a substantial improvement

among others. The figure was down by 3.2%p to 67.2% because the accident rate fell slightly and net premiums earned increased by 3.2%

on account of premium hikes over the last two years.

The loss ratio in long-term insurance also dipped to 83.8%, a 1.1% decrease from a year earlier, due to a decrease in the interest burden

from a decline in the legacy of high-fixed guarantees that were matured. In the meantime, the general line loss ratio went up by 1.9%p from

the last year to 56.2% by virtue of an increase in O/S reserves.

The overall expense ratio amounted to 23% or a 1.3%p rise year-on-year in the aftermath of changes in the commission payment method. In

fiscal 2008, commissions were paid in up front for major long-term products and this led to an increase in payments and, in turn, the overall

expense ratio.

By items, the wages and severance benefit ratio was up 0.2%p year-on-year to 5.3% while distribution costs went upward by 1.1%p.

Business administration costs increased 0.1%p to 7.3%, but the expense recovered ratio slid marginally. The overall expense ratio stood at

23%, a 1.3%p increase from the previous year.


Underwriting Efficiency

Loss Ratio 76.6% 78.1% -1.5%p

General 56.2% 54.3% 1.9%p

Long-term 83.8% 84.9% -1.1%p

Automobile 67.2% 70.4% -3.2%p

Expense Ratio 23.0% 21.7% 1.3%p

General 16.3% 18.3% -2.0%p

Long-term 19.4% 17.4% 2.0%p

Automobile 31.1% 29.5% 1.7%p

Combined Ratio 99.6% 99.8% -0.1%p

Change %FY08 FY07

Miscellaneous Business Expense Ratio

Wages and Severance Benefits Ratio 5.3% 5.1% 0.2%p

Distribution Costs 1) 12.2% 11.1% 1.1%p

Business Administration Costs 7.3% 7.2% 0.1%p

Expenses Recovered 2) -1.9% -1.8% -0.1%p

Total 23.0% 21.7% 1.3%p

Change %FY08 FY07

1) acquisition and collection cost, transaction fees, deferred acquisition cost2) recovered commissions, recovered profit commissions


4. Profit from Investment Operations

The investment profit in fiscal 2008 was KRW887.6 billion, representing growth of 14.9% from KRW114.9 billion for the previous year. The

net investment yield was up 0.1%p year-on-year to 4.9% on the back of increased profit from fixed income type assets such as bonds and

loans.Profit from bonds surged by 13.5% or KRW62.5 billion to KRW524.2billion. Profit from loans grew by 19.2% or KRW52 billion to

KRW322.5 billion.

The overseas investment yield declined 2.3%p from last year because of KRW6.8billion in losses from the write-down of collateralized debt

obligation (CDO) bonds. The CDOs owned by SF&MI are not sub-prime loans, but are AAA-rated senior bonds which are safe from the risk

of default. However, a conservative accounting decision was made to write these off considering the extended CDO credit spread caused

by a scarcity of global credit while some of the CDOs were recovered as bonds.

5. Income Tax Expenses

In fiscal 2008, profit before income tax recorded a gain of KRW160.4billion or 24.3% year-on-year to KRW820.8 billion. Subsequently,

income tax increased by KRW38.2 billion from a year ago to KRW222.1 billion. The official corporate tax rate including residency tax was set

at 27.5%. However, the effective tax rate for the period was set at 27.1%, or a 0.7%p drop from the previous year.

Financial Section

Investment Income

Cash and Equivalents 29.6 20.0 9.5 48.0%

Stocks 59.2 55.3 3.9 7.0%

Bonds 524.2 461.8 62.5 13.5%

Loans 322.5 270.5 52.0 19.2%

Overseas 22.2 29.4 -7.2 -24.5%

Real Estate 13.1 12.0 1.0 9.2%

Total 970.7 849.0 121.7 14.3%

Investment Administration Expenses 1) 83.1 76.4 6.7 8.8%

Investment Income 887.6 772.7 115.0 14.9%

Net Investment Yield 4.9% 4.8% 0.1%p

FY08 FY07

1) Bad debt expenses and depreciation costs have been distributed by asset.

Won Change %

Income Tax Charges

Income Before Income Tax Charges 820.8 660.4 160.4 24.3%

Income Tax Charges 222.1 183.9 38.2 20.8%

Effective Tax Rate 27.1% 27.8% -0.7%p

FY08 FY07


Won Change %


B. Balance Sheet

1. Financial Conditions

Total assets in fiscal 2008 jumped 11.3% or KRW2,351.7 billion to reach KRW23,092.2 billion. In terms of monetary value, bond assets

posted the most increase. Assets swelled by KRW1,159.4 billion to KRW10,428.8 billion thanks to an increase in available-for-sale bonds,

particularly long-term bonds that include government agency bonds and financial debentures.

Stocks were valued at KRW1,974.7 billion, a 2.8% drop from a year earlier, because of the drop in share prices of affiliates and the

subsequent losses in their valuations. Loans increased by 14.6% year-on-year, totaling KRW4,720.3 billion. Overseas securities posted a

51.5% increase, the largest growth among assets, mainly buoyed by the purchase of long-term bonds with high potential for profitability

such as Korea Paper.

Total liabilities in fiscal 2008 amounted to KRW19,229.2 billion, increasing 11% or KRW1,904.2 billion from last year. Policy reserves, which

make up the largest part of liabilities moved upward by 10.6% year-on-year to KRW15,747.7 billion. Catastrophe reserves rose 7.4% to

KRW1,059.3 billion while other liabilities and separate account liabilities climbed by 24.1% and 6 % each.

Total shareholders’ equity for the fiscal year was up 13.1% or KRW447.4 billion to KRW3,863.0 billion. Retained earnings grew 25.6% to

KRW2,257.2 billion backed by an increase in net profit. Accumulated other comprehensive income dipped 1.4% from a year ago to

KRW937.2 billion owing to losses in valuation of available-for-sale securities. As of the end of fiscal 2008, the solvency margin ratio was

374.8%, representing a 12.3%p increase from the previous year. Considering that the statutory solvency margin is 100%, the figure is not

only much above the guideline, but is also one of the highest in the industry.


Balance Sheet Summary

Cash & Equivalents 596.0 2.6% 566.3 2.7% 29.7 5.2%

Stocks 1,974.7 8.6% 2,031.7 9.8% -57.0 -2.8%

Bonds 10,428.8 45.2% 9,269.4 44.7% 1,159.4 12.5%

Loans 4,720.3 20.4% 4,120.0 19.9% 600.3 14.6%

Overseas 933.8 4.0% 616.3 3.0% 317.5 51.5%

Real Estate 1,087.5 4.7% 1,036.5 5.0% 51.0 4.9%

Non-invested Assets 3,351.2 14.5% 3,100.3 14.9% 250.9 8.1%

Total Assets 23,092.2 100.0% 20,740.5 100.0% 2,351.7 11.3%

Policy Reserves 15,747.7 68.2% 14,239.8 68.7% 1,507.9 10.6%

Catastrophe Reserves 1,059.3 4.6% 986.7 4.8% 72.6 7.4%

Other Liabilities 1,357.8 5.9% 1,094.3 5.3% 263.5 24.1%

Separate A/C Liabilities 1,064.4 4.6% 1,004.1 4.8% 60.3 6.0%

Total Liabilities 19,229.2 83.3% 17,325.0 83.5% 1,904.2 11.0%

Shareholders’ Equity 3,863.0 16.7% 3,415.6 16.5% 447.4 13.1%

Total Liabilities and

Shareholders’ Equity 23,092.2 100.0% 20,740.5 100.0% 2,351.7 11.3%

Solvency Margin Ratio 374.8% 362.5% 12.3%p

Korea Won / in billions, %

AmountFY08

% AmountFY07

% AmountChange

%


2. Securities

At the end of fiscal 2008, securities including stocks and bonds increased KRW1,102.4 billion or 9.8% from the previous year to

KRW12,403.4 billion.

The value of stocks dropped by 2.8% or KRW57.0 billion to KRW1,974.7 billion because the stock prices of affiliates such as Samsung

Electronics and Samsung Securities, which were classified as available-for-sale securities, were down. The equities of affiliates hold a major

share of 69.8% of the total portfolio while beneficiary certificates follow with a share of 20.5%. Equities categorized as the equity method rose

by KRW45.1 billion or 6.0% to KRW119.0 billion.

Total bond assets were up 12.5% year-on-year or KRW1,159.4 billion to KRW10,428.8 billion. While short-term trading bonds grew

KRW2.5 billion to KRW141.9 billion, available-for-sale bonds, thanks to an increase in government agency bonds and financial debentures,

jumped by KRW1,046.8 billion or 11.5% compared to a year earlier to KRW10,156.7 billion.

3. Loans and Asset Quality

At the end of fiscal 2008, loans were KRW4,763.4 billion, up 14.5% or KRW601.6 billion from a year ago.

Retail loans expanded by 7.2% or KRW250.6 billion from the previous year to KRW3,718.4 billion. Mortgage loans, among others, increased

by KRW78.7 billion to KRW2,044.4 billion. Policyholder loans were up by KRW171.6 billion or 11.7% to reach KRW1,635.1 billion.

Corporate loans stood at KRW1,045.0 billion with a year-on-year increase of 50.6% or KRW351.0 billion. Secured and non-secured loans

surged by KRW306.2 billion and KRW44.9 billion, respectively, bringing the growth rate to as high as 50.7% and 49.8%. The quality of loans

has improved on a sustained basis. Substandard and below loans, despite the growth of loans, dwindled by KRW2.3 billion to KRW15.2

billion. The nonperforming loans (NPL) ratio also fell by 0.1%p to 0.3%. The NPL coverage ratio (loan loss provision to the substandard and

below loans ratio) rose by 40.7%p from the previous year to 225.8%. Effective loan management pulled down the delinquency ratio by

0.1%p to 0.4%. The delinquency ratio of corporate loans, in particular, slid 0.4%p from a year ago.

Financial Section

Loans

Household Loans 3,718.4 78.1% 3,467.8 83.3% 250.6 7.2%

Mortgages 2,044.4 42.9% 1,965.7 47.2% 78.7 4.0%

Policyholders 1,635.1 34.3% 1,463.5 35.2% 171.6 11.7%

Non-secured 38.9 0.8% 38.6 0.9% 0.3 0.8%

Corporate Loans 1,045.0 21.9% 694.0 16.7% 351.0 50.6%

Secured 909.9 19.1% 603.7 14.5% 306.2 50.7%

Non-secured 135.1 2.8% 90.2 2.2% 44.9 49.8%

Total 1) 4,763.4 100.0% 4,161.8 100.0% 601.6 14.5%


AmountFY08

% AmountFY07

% AmountChange

%

1) Excluding call loan & prior to subtracting loan provision, deferred additional income


Asset Quality Korea Won / in billions, %, %p

Total Loans 4,798.9 4,181.6 617.3 14.8%

Normal 4,779.5 4,158.7 620.8 14.9%

Precautionary 4.3 5.3 -1.0 -18.9%

Substandard 11.3 11.1 0.2 1.8%

Doubtful 1.2 2.1 -0.9 -42.9%

Estimated Losses 2.6 4.3 -1.7 -39.5%

Standard & below 15.2 17.5 -2.3 -13.5%

Non-Performing Loans to Total Loans Ratio 0.3% 0.4% -0.1%p

Loan Loss Provisions to Substandard &

below Loans Ratio 266.5% 225.8% 40.7%p

Delinquency Ratio 0.4% 0.5% -0.1%p

Household 0.5% 0.5% 0.0%p

Corporate 0.1% 0.5% -0.4%p

AmountFY08Change

%FY07

Financial Section

4. Asset & Liability Management

The ALM spread on long-term insurance proved to be in better shape than a year before. The reason for this was that lower market interest

rates lightened the burden of interest on liabilities while returns on matching assets increased due to active bond swaps.

Interest on liabilities was cut by 0.37%p to 4.8% while returns on matching assets grew by 0.06%p from a year earlier to 5.8%. This brought

the ALM spread at the end of fiscal 2008 to 0.94%p, a 0.44%p increase from the previous year. The difference between the duration of

assets and liabilities was flat at 0.40 years when compared to a year earlier.


ALM on Long-term Insurance

Assets 1) 13,092.3 5.76 2.96 11,108.4 5.70 2.87 1,984.0 0.06 0.09

Liabilities 2) 12,840.9 4.82 3.36 11,360.8 5.20 3.27 1,480.1 -0.37 0.09

Spread 251.4 0.94 -0.40 -252.4 0.50 -0.4 503.9 0.44 0.00

Korea Won / in billions, %, %p, yr

Amount Yield DurationFY08

Amount Yield DurationFY07

Amount Yield DurationChange

1) The sum of invested assets and unamortized deferred assets2) The sum of reserves for savings, unearned premiums, and reserves for lapsed policies

INDEPENDENT AUDITORS’ REPORTENGLISH TRANSLATION OF A REPORT ORIGINALLY ISSUED IN KOREAN

To the Shareholders and Board of Directors ofSamsung Fire & Marine Insurance Co., Ltd.:

We have audited the accompanying balance sheets of Samsung Fire & Marine Insurance Co., Ltd. (the “Company”)as of March 31, 2009

and 2008, and the related statements of income, appropriations of retained earnings, changes in shareholders’ equity and cash flows for the

years then ended, all expressed in Korean won. These financial statements are the responsibility of the Company’s management. Our

responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as

evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of

March 31, 2009 and 2008, and the results of its operations, changes in its retained earnings and shareholders’ equity, and its cash flows for

the years then ended, in conformity with accounting principles generally accepted in the Republic of Korea.

Our audits also comprehended the translation of Korea Won amounts into U.S. Dollar amounts and, in our opinion, such translation has

been made in conformity with the basis in Note 2. Such U.S. Dollar amounts are presented solely for the convenience of the reader outside

of Korea.

Accounting principles and auditing standards and their application in practice vary among countries. The accompanying financial statements

are not intended to present the financial position, results of operations, changes in its shareholder’s equity and cash flows in accordance

with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and

practices utilized in the Republic of Korea to audit such financial statements may differ from those generally accepted and applied in other

countries. Accordingly, this report and the accompanying financial statements are intended for use by those knowledgeable about Korean

accounting procedures and auditing standards and their application in practice.

Notice to ReadersThis report is effective as of May 8, 2009, the auditors’ report date. Certain subsequent events or circumstances may have occurred between the auditors’ report date

and the time the auditors’ report is read. Such events or circumstances could significantly affect the accompanying financial statements and may result in modifications

to the auditors’ report.

Deloitte Anjin LLC14Fl., Hanwha Securities Bldg., 23-5 Yoido-dong,

Youngdeungpo-gu, Seoul 150-717, Korea

Tel:+82.2.6676 1000, 1114 Fax:+82.2.6674 2114www.deloitteanjin.co.kr

May 8, 2009


BALANCE SHEETSAS OF MARCH 31, 2009 AND 2008

Korea Won / in millions

ASSETS

Cash and due from banks (Notes 3 and 17) ￦595,980 ￦566,337 $ 432,779 $ 411,254

Trading securities (Notes 4 and 8) 228,509 198,068 165,935 143,830

Available-for-sale securities (Notes 5, 8, 17 and 31) 12,859,532 11,625,351 9,338,125 8,441,908

Held-to-maturity securities (Note 6) 130,146 20,000 94,507 14,523

Securities accounted for using the equity method (Note 7) 119,015 73,933 86,424 53,687

Loans, net of allowance for doubtful accounts of

￦40,229 million in 2009 and ￦39,499 million in 2008, and

deferred loan origination fees of ￦2,839 million in 2009 and

￦2,236 million in 2008 (Notes 9 and 29) 4,720,338 4,120,042 3,427,738 2,991,825

Property and equipment, net (Notes 10, 14 and 24) 1,142,346 1,093,666 829,530 794,180

Insurance receivables, net of allowance for doubtful accounts of

￦5,013 million in 2009 and ￦4,916 million in 2008

(Notes 9, 12, 17 and 29) 211,579 188,567 153,641 136,931

Leasehold and other deposits 203,809 193,081 147,999 140,209

Accrued income, net of allowance for doubtful accounts of

￦162 million in 2009 and ￦154 million in 2008 (Note 9) 177,036 194,674 128,557 141,365

Compensation receivables (Note 13) 105,600 109,839 76,683 79,761

Deferred acquisition costs (Note 21) 1,304,936 1,132,476 947,597 822,363

Other assets (Notes 11, 31 and 34) 245,975 234,115 178,618 170,005

Separate account assets, net of due to separate account of


(Notes 2 and 32) 1,047,358 990,397 760,553 719,190

Total assets ￦ 23,092,159 ￦20,740,546 $ 16,768,686 $ 15,061,031

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:

Policy reserves (Notes 15, 31 and 38) ￦15,747,731 ￦14,239,827 $ 11,435,430 $ 10,340,445

Catastrophe reserves (Note 16) 1,059,285 986,676 769,214 716,488

Borrowings (Notes 5 and 18) 25,500 - 18,517 -

Insurance payables (Notes 12, 17 and 29) 274,745 253,147 199,509 183,827

Accrued expenses 151,115 130,306 109,734 94,624

Income tax payables (Note 23) 175,763 81,872 127,633 59,453

Rental deposits received (Note 31) 30,927 30,247 22,458 21,964

Deferred income tax liabilities (Note 23) 285,058 402,956 206,999 292,612

Other liabilities (Notes 2, 22, 31 and 34) 414,679 195,803 301,125 142,184

Separate account liabilities, net of due from separate account of


(Notes 2 and 32) 1,064,385 1,004,141 772,918 729,171

Total liabilities 19,229,188 17,324,975 13,963,537 12,580,768

20092009 20082008

Translation into U.S. Dollars (Note 2) / In thousands

Financial Section

CONTINUED

20092009 20082008

Korea Won / in millions Translation into U.S. Dollars (Note 2) / In thousands

COMMITMENTS AND CONTINGENCIES (Note 31)

SHAREHOLDERS’ EQUITY (Notes 24, 25, 26 and 27):

Capital stock of ￦500 par value,

Authorized (100,000,000 shares),

Issued and outstanding:

-Common stock (47,374,837 shares) ￦24,802 ￦24,802 $ 18,011 $ 18,011

-Preferred stock ( 3,192,000 shares) 1,671 1,671 1,213 1,213

26,473 26,473 19,224 19,224

Capital surplus 734,867 733,749 533,634 532,822

Capital adjustments (92,708) (93,039) (67,322) (67,562)

Accumulated other comprehensive income 937,168 950,596 680,537 690,288

Retained earnings 2,257,171 1,797,792 1,639,076 1,305,491

Total shareholders' equity 3,862,971 3,415,571 2,805,149 2,480,263

Total liabilities and shareholders' equity ￦23,092,159 ￦20,740,546 $ 16,768,686 $ 15,061,031

50/5105.2 Financial StatementsSamsung Fire & Marine Insurance Annual Report 2008

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

20092009 20082008

STATEMENTS OF INCOMEFOR THE YEARS ENDED MARCH 31, 2009 AND 2008

Korea Won/ In millions, except per share amounts

OPERATING REVENUES:

Premium income (Notes 19 and 29) ￦9,737,109 ￦9,097,270 $ 7,070,735 $ 6,606,107

Reinsurance income (Note 20) 357,585 321,204 259,665 233,247

Compensation income (Note 13) (4,239) 12,458 (3,078) 9,046

Interest income:

Interest on deposits 29,811 21,468 21,648 15,589

Interest on securities (Notes 5 and 6) 570,574 492,393 414,330 357,558

Interest on loans 328,313 274,958 238,409 199,665

928,698 788,819 674,387 572,812

Gain on valuation and disposal of securities:

Gain on valuation of trading securities (Notes 4 and 8) 991 1,363 720 990

Gain on disposal of trading securities 2,425 3,196 1,761 2,321

Gain on disposal of available-for-sale securities 18,387 26,175 13,352 19,007

Reversal of impairment loss on available-for-sale securities(Note 5) - 2,936 - 2,132

21,803 33,670 15,833 24,450

Gain on valuation and disposal of loans 985 185 715 134

Gain on foreign currency transactions 100,973 10,603 73,323 7,700

Dividend income 28,716 35,409 20,852 25,713

Commission income 12 - 8 -

Rental income 39,412 36,819 28,620 26,736

Expenses recovered 166,856 152,027 121,165 110,396

Other operating income:

Gain on valuation of derivatives (Note 31) 2,559 200 1,858 145

Gain on transaction of derivatives 5,155 1,735 3,743 1,260

Miscellaneous investment income 1,311 699 952 508

Miscellaneous income 621 494 451 359

Other (Note 15) 38,407 3,245 27,890 2,356

48,053 6,373 34,894 4,628

Separate account income (Note 32) 444,768 508,853 322,974 369,511

11,870,731 11,003,690 8,620,093 7,990,480

OPERATING EXPENSES:

Provision for policy reserves (Notes 15 and 31) 1,546,311 1,774,888 1,122,875 1,288,859

Provision for catastrophe reserves (Note 16) 72,609 51,339 52,726 37,281

Claims paid (Note 29) 3,450,403 3,210,678 2,505,557 2,331,478

Reinsurance premium expenses (Note 20) 775,700 674,259 563,285 489,622

Dividend expense 10,060 10,270 7,305 7,457

Refund of long-term insurance policies 2,243,094 1,935,652 1,628,853 1,405,600

Selling and general operating expenses(Notes 10, 22, 29 and 33) 1,690,949 1,574,349 1,227,906 1,143,235

Amortization of deferred acquisition costs (Note 21) 571,049 435,605 414,675 316,321

Interest expense 2,297 1,419 1,668 1,030

Loss on valuation and disposal of securities:

Loss on valuation of trading securities (Note 4) 9 154 7 112

Loss on disposal of trading securities 347 708 252 514

CONTINUED

Translation into U.S. Dollars (Note 2)/ In thousands, except per share amounts

Financial Section

20092009 20082008

Korea Won/ In millions, except per share amounts

Loss on disposal of available-for-sale securities ￦20,834 ￦8,328 $ 15,129 $ 6,048

Impairment loss of available-for-sale securities (Note 5) 9,033 6,811 6,559 4,946

30,223 16,001 21,947 11,620

Loss on valuation and disposal of loans 2,487 2,778 1,806 2,017

Loss on foreign currency transactions 73,768 7,948 53,568 5,772

Investment administrative expenses (Notes 10 and 22) 83,342 76,625 60,520 55,642

Maintenance expenses on investments 18,380 17,129 13,347 12,438

Depreciation expense on investments (Note 10) 7,705 7,411 5,595 5,382

Other operating expenses:

Loss on valuation of derivatives (Note 31) 14,696 8,753 10,672 6,356

Loss on transaction of derivatives 26,009 3,482 18,887 2,529

Miscellaneous investment expenses 2,900 2,690 2,106 1,953

Miscellaneous expenses 856 334 621 242

44,461 15,259 32,286 11,080

Separate account expense (Notes 32) 444,768 508,853 322,974 369,511

11,067,606 10,320,463 8,036,893 7,494,345

OPERATING INCOME 803,125 683,227 583,200 496,135

OTHER INCOME (EXPENSES):

Gain on valuation of securities accounted for using the

equity method (Note 7) 18,083 9,518 13,131 6,912

Loss on valuation of securities accounted for using the

equity method (Note 7) (230) (879) (167) (639)

Gain (Loss) on disposal of securities accounted for using the

equity method (Note 7) 6,951 (1,067) 5,047 (774)

Gain (Loss) on disposal of property and equipment, net (56) 242 (41) 175

Donations (Note 35) (15,147) (20,553) (10,999) (14,925)

Separate account commission, net (Note 32) 7,200 5,774 5,229 4,193

Miscellaneous, net 879 (15,897) 639 (11,544)

17,680 (22,862) 12,839 (16,602)

INCOME BEFORE INCOME TAX 820,805 660,365 596,039 479,533

INCOME TAX EXPENSE (Note 2 and 23) 222,097 183,875 161,279 133,523

NET INCOME ￦598,708 ￦476,490 $ 434,760 $ 346,010

NET INCOME PER COMMON SHARE (Note 30) ￦13,542 ￦10,406 $ 9.83 $ 7.56

DILUTED NET INCOME PER COMMON SHARE (Note 30) ￦13,488 ￦10,358 $ 9.79 $ 7.52


Translation into U.S. Dollars (Note 2)/ In thousands, except per share amounts


20092009 20082008

STATEMENTS OF APPROPRIATIONS OF RETAINED EARNINGSFOR THE YEARS ENDED MARCH 31, 2009 AND 2008

Korea Won / In millions

RETAINED EARNINGS BEFORE APPROPRIATIONS:

Unappropriated retained earnings carried

over from prior years ￦216 ￦269,875 $ 157 $ 195,973

Retirement of treasury stock through

retained earnings (Note 24) - (262,821) - (190,851)

Net income 598,708 476,490 434,760 346,010

598,924 483,544 434,917 351,132

APPROPRIATIONS:

Dividends (Note 28) 139,493 139,329 101,295 101,175

Voluntary reserves 459,000 344,000 333,309 249,800

598,493 483,329 434,604 350,975

UNAPPROPRIATED RETAINED

EARNINGS TO BE CARRIED

FORWARD TO SUBSEQUENT YEAR ￦431 ￦216 $ 313 $ 157



Financial Section

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEARS ENDED MARCH 31, 2009 AND 2008

As of April.1, 2007 ￦26,473 ￦733,340 ￦ (92,881) ￦879,883 ￦1,656,175 ￦3,202,990

Annual dividends - - - - (72,052) (72,052)

Balance after appropriations 26,473 733,340 (92,881) 879,883 1,584,123 3,130,938

Retirement of treasury stock through

retained earnings (Note 24) - - - - (262,821) (262,821)

Net income - - - - 476,490 476,490

Gain on disposal of treasury stock - 409 - - - 409

Disposal of treasury stock - - 336 - - 336

Exercise of stock options - - (312) - - (312)

Compensation expense related to stock options - - (182) - - (182)

Gain on valuation of available-for-sale securities - - - 100,413 - 100,413

Changes in equity arising from

application of the equity method - - - 461 - 461

Negative changes in equity arising from

application of the equity method - - - 7,016 - 7,016

Cumulative translation debits - - - 2,848 - 2,848

Loss on valuation of cash flow hedge derivatives - - - (40,109) - (40,109)

Accumulated other comprehensive

income arising from separate account - - - 84 - 84

As of March. 31, 2008 ￦26,473 ￦733,749 ￦ (93,039) ￦950,596 ￦1,797,792 ￦3,415,571

Korean Won / In millions


Capital stock Capitalsurplus

Capitaladjustment

Accumulatedother

comprehensiveincome

Retainedearnings Total

As of April.1, 2008 ￦26,473 ￦733,749 ￦ (93,039) ￦950,596 ￦1,797,792 ￦3,415,571

Annual dividends - - - - (139,329) (139,329)

Balance after appropriations 26,473 733,749 (93,039) 950,596 1,658,463 3,276,242

Net income - - - - 598,708 598,708

Gain on disposal of treasury stock - 1,118 - - - 1,118

Disposal of treasury stock - - 1,362 - - 1,362

Exercise of stock options - - (1,031) - - (1,031)

Gain on valuation of available-for-sale securities - - - 103,614 - 103,614


application of the equity method - - - 19,009 - 19,009


application of the equity method - - - (472) - (472)

Cumulative translation debits - - - 21,489 - 21,489

Loss on valuation of cash flow hedge derivatives - - - (158,718) - (158,718)


income arising from separate account - - - 1,650 - 1,650

As of March. 31, 2009 ￦26,473 ￦734,867 ￦ (92,708) ￦937,168 ￦ 2,257,171 ￦3,862,971

Translation into U.S. Dollars (Note 2) (In thousands)

Capital stock Capitalsurplus

Capitaladjustment

Accumulatedother

comprehensiveincome

Retainedearnings Total


20092009 20082008

STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED MARCH 31, 2009 AND 2008


CASH FLOWS FROM OPERATING ACTIVITIES:

Net income ￦598,708 ￦476,490 $ 434,760 $ 346,010

Adjustments to reconcile net income to net cash provided by

operating activities:

Executive compensation - stock options - (182) - (132)

Gain on valuation of trading securities, net (982) (1,209) (713) (878)

Impairment loss on available-for-sale securities 9,033 6,811 6,559 4,946

Amortization of deferred acquisition cost 571,049 435,605 414,675 316,321

Loss on valuation of derivatives , net 12,137 8,553 8,814 6,211

Gain on valuation of securities accounted for using the

equity method (18,083) (9,518) (13,131) (6,912)

Gain on disposal of securities accounted for using the

equity method (6,951) - (5,047) -

Loss on valuation of securities accounted for using the

equity method 230 879 167 639

Loss on sales of securities accounted for using the equity method - 1,067 - 774

Depreciation 56,060 59,882 40,709 43,484

Loss (gain) on disposal of property and equipment, net 56 (242) 41 (175)

Amortization 32,916 30,794 23,902 22,362

Gain on foreign currency transactions, net (28,651) (3,573) (20,805) (2,594)

Bad debt expense 2,976 3,538 2,161 2,569

Net provision for policy and catastrophe reserves 1,618,920 1,826,227 1,175,601 1,326,140

Provision for severance indemnities 36,246 31,679 26,321 23,004

Miscellaneous loss (gain), net 222 (1,454) 161 (1,057)

Interest income (18,204) (16,706) (13,222) (12,133)

Reversal of impairment loss on available- for-sale securities - (2,936) - (2,132)

Reversal of allowance for doubtful accounts (985) (185) (716) (134)

Compensation income 4,239 (12,458) 3,078 (9,046)

Other operation income (38,407) (3,245) (27,890) (2,356)

Changes in assets and liabilities resulting from operations:

Decrease (increase) in trading securities (29,262) 116,339 (21,249) 84,481

Increase in available-for-sale securities (1,171,429) (1,262,138) (850,649) (916,519)

Increase in held-to-maturity securities (110,141) (18,660) (79,981) (13,550)

Reception of dividends 1,010 1,260 734 915

Increase in loans, net (602,005) (534,950) (437,154) (388,461)

Increase in insurance receivables (22,894) (14,811) (16,625) (10,755)

Decrease (increase) in leasehold and other deposits (10,914) 5,987 (7,925) 4,348

Decrease (increase) in accrued income 17,664 (16,703) 12,827 (12,129)

Increase in deferred acquisition costs (743,509) (612,630) (539,909) (444,870)

Decrease (increase) in financial derivative assets (10,238) 8,390 (7,434) 6,092

Decrease (increase) in other assets (21,675) 5,453 (15,740) 3,960

Increase in due from separate account (11,589) (16,739) (8,416) (12,155)

CONTINUED

Translation into U.S. Dollars (Note 2)/ In thousands

Financial Section

20092009 20082008


Increase (decrease) in insurance payables ￦23,219 ￦ (34,539) $ 16,861 $ (25,081)

Increase in accrued expenses 20,809 4,047 15,111 2,939

Increase (decrease) in deferred income tax liabilities (15,024) 228,731 (10,910) 166,096

Payment of severance indemnities (14,428) (3,345) (10,477) (2,429)

Transfer of deposits from the National Pension Fund 31 29 22 21

Transfer-in of severance indemnities 4,068 - 2,954 -

Increase in pension plan assets (25,735) (17,829) (18,687) (12,947)

Increase in income tax payables 93,467 32,867 67,872 23,866

Increase (decrease) in rental deposits received 680 (2,009) 494 (1,459)

Increase (decrease) in financial derivative liabilities 5,345 (6,465) 3,881 (4,695)

Increase in other liabilities 990 9,496 719 6,896

Increase in due to separate account 16,522 16,914 11,998 12,283

Increase in overseas operation translation gain 21,489 2,848 15,605 2,068

Net cash provided by operating activities 246,980 721,360 179,347 523,826

CASH FLOWS FROM INVESTING ACTIVITIES:

Disposal of securities accounted for using the equity method 10,191 2,725 7,400 1,979

Increase in bank deposits (62,691) (96,690) (45,524) (70,213)

Disposal of property and equipment 1,366 327 992 238

Acquisition of property and equipment (106,176) (126,200) (77,101) (91,642)

Acquisition of securities accounted for using the equity Method (4,088) - (2,969) -

Acquisition of intangible assets (12,178) (8,605) (8,843) (6,249)

Net cash used in investing activities (173,576) (228,443) (126,045) (165,887)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of dividends (139,329) (72,052) (101,175) (52,321)

Increase (decrease) of borrowings, net 300 (100) 218 (73)

Acquisition of treasury stock - (262,821) - (190,851)

Increase of bond sold under repurchase agreements 25,200 - 18,299 -

Disposal of treasury stock 1,873 588 1,360 427

Net cash used in financing activities (111,956) (334,385) (81,298) (242,818)

NET INCREASE (DECREASE) IN CASH AND CASH

EQUINVALENTS (38,552) 158,532 (27,996) 115,121

CASH AND DUE FROM BANKS, BEGINNING OF YEAR (Note 37) 257,135 98,603 186,723 71,602

CASH AND DUE FROM BANKS, END OF YEAR (Note 37) ￦218,583 ￦257,135 $ 158,727 $ 186,723

Translation into U.S. Dollars (Note 2)/ In thousands



NOTES TO FINANCIAL STATEMENTSFOR THE YEARS ENDED MARCH 31, 2009 AND 2008

Common stock

Shareholders

Samsung Life Insurance Co., Ltd. 4,905,718 10.36 720 0.02

Samsung Card Co., Ltd. 2,298,377 4.85 - -

Shinhan Bank (National Pension) 1,786,310 3.77 140,508 4.40

GIS/BONY/SSB/NYC-SD AR MA 1,676,057 3.54 - -

The TOKIO M.A.F INSU 1,488,150 3.14 - -

Others 35,220,225 74.34 3,050,772 95.58

47,374,837 100.00 3,192,000 100.00

Preferred stock

1. GENERAL:

Samsung Fire & Marine Insurance Co., Ltd. (the “Company") was incorporated on January 26, 1952 under the Commercial Code of the

Republic of Korea to engage in non-life insurance and other related investment activities. The shares of the Company have been listed on

the Korea Stock Exchange since 1975. As of March 31, 2009, the Company’s issued common shares and preferred shares amounting to

￦24,802 million and ￦1,671 million, respectively.

The Company’s shareholders as of March 31, 2009 are as follows:

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Financial Statement Presentation

The Company maintains its official accounting records in Korean won and prepares statutory financial statements in the Korean language

(Hangul) in conformity with the accounting principles generally accepted in the Republic of Korea. Certain accounting principles applied by

the Company that conform with financial accounting standards and accounting principles in the Republic of Korea may not conform with

generally accepted accounting principles in other countries. Accordingly, these financial statements are intended for use only by those who

are informed about Korean accounting principles and practices. The accompanying financial statements have been condensed, restructured

and translated into English (with certain expanded descriptions) from the Korean language financial statements. Certain information attached

to the Korean language financial statements, but not required for a fair presentation of the Company's financial position, results of operations,

changes in shareholders’ equity or cash flows, is not presented in the accompanying financial statements.

The accompanying financial statements are stated in Korean Won, the currency of the country in which the Company is incorporated and

operates. The translation of Korean Won amounts into U.S. Dollar amounts is included solely for the convenience of the readers outside of

the Republic of Korea and has been made at the rate of ￦1,377.10 to US$ 1.00 at March 31, 2009, the Base Rate announced by Seoul

Money Brokerage Services, Ltd. Such translation should not be construed as representations that the Korean won amounts could be

converted at that or any other rate.

The 2009 financial statements to be submitted to the general meeting of shareholders were approved by the board of directors on May 8,

2009.

The significant accounting policies followed by the Company in the preparation of its financial statements are summarized below.

Number of shares

Number of shares

Percentage ofownership (%)

Percentage ofownership (%)

Financial Section

Adoption of Statements of Korean Accounting Standards (“SKASs”)

(1) Newly adopted standards

Through March 31, 2009, the Korea Accounting Standards Board (“KASB”) has issued SKASs No. 1 through No. 25 to revise the previous

Financial Accounting Standards. Certain SKASs were amended, and interpretations and opinions were released. A summary of the

amended SKASs, Interpretations and Opinions, which have been adopted by the Company, is as follows:

Adopting the above amended standards had no impact on net income for the years ended March 31, 2009 and 2008, respectively, and net

assets as of March 31, 2009 and 2008, respectively.

(2) Recent Changes in Korean Accounting Standards

Korea Financial Accounting Standards, SKAS, Interpretation on Korea Financial Accounting Standards, Opinion on Application of Accounting

Standards and Opinion on Financial Reporting Practice (collectively referred to as “KFAS and others”) that were issued or amended by the

Korea Accounting Institute and the Financial Supervisory Service for the year ended March 31, 2009 and adopted by the Company for the

year ended March 31, 2009 are summarized below.

Key requirementsSKASs/Interpretation/Opinion

SKAS No. 15 "Investments in Associates"

SKAS No. 16 "Income Taxes"

Interpretation 53-70 "Accounting for

Derivative Instruments"

쪾Clarify that receivables collected after the balance sheet date and short-term loans are

excluded from long-term investments

쪾Clarify that upon additional purchase of subsidiary’s stocks, the purchase price is

compared to the net assets of the subsidiary in the consolidated balance sheet

쪾Amend note disclosure items as follows:

① In the disclosure for details of income tax expense, total income tax effect and intra-

period allocation is disclosed together;

② Disclosure of details of tax adjustment items is no longer required, but the

reconciliation between income before income tax expense and income tax expense is

disclosed.

쪾Clarify guidelines to distinguish guarantee contracts and credit derivatives

쪾Set up a basis which can allow the designation of existing derivatives as hedging

instruments considering its economic substance

쪾Revise provisions in order to expand the scope of hedge accounting for foreign

exchange risk, which was previously permitted on a limited basis



DescriptionAccounting standardsSKAS No. 8

“Investments in Securities”

SKAS No. 15

“Investments in Associates”

SKAS No. 25

“Consolidated Financial Statements”

Interpretation 53-70

“Accounting for Derivatives and Others”

Opinion on Application of Accounting

Standards 06-2 “Accounting for

Recognition of Deferred Tax Related to

Investments on a Subsidiary”

Opinion on Application of Accounting

Standards 08-3“Factors to Consider for

Fair Value of Financial Instruments”

Opinion on Financial Reporting

Practice 2008-2

쪾In rare cases, the trading securities may be reclassified as other categories of securities

when an entity changes its intention to trade the securities in the near future.

쪾Clarifies that in applying the equity method to subsidiaries, except for those instances

where the total investment is equal to or less than zero, the net assets and net income

or loss on the nonconsolidated financial statements of the subsidiary is identical to the

net interest in the subsidiary’s net assets and net income or loss on the consolidated

financial statements of the parent.

쪾Clarifies that Subparagraphs (Ga) to (Sa) of Paragraph 39 are illustrative. In addition, the

difference between the consideration for the net interest and the net interest in the net

assets of the subsidiary, as described under Subparagraphs (Na) to (Ra), is recognized

as additional paid-in-capital in the consolidated financial statements of the parent.

쪾If negative consolidated capital surplus is incurred, it is first charged to related

consolidated capital surplus, and remaining amount is recorded as a consolidated

capital adjustment.

쪾Non- derivative financial instruments denominated in a foreign currency may be

designated as hedging instruments for the foreign currency exchange exposure of an

unrecognized firm commitment denominated in a foreign currency, and gains (losses)

may be treated as other comprehensive income (loss).

쪾Gains (losses) arising from derivatives that ceased or were presettled before maturity

are deferred to the point when the firm commitment is realized.

쪾Temporary differences related to investments in subsidiary, equity method investee or

joint venture are not classified by origin but are treated as a lump-sum difference in

considering whether to recognize deferred tax assets or liabilities. However, temporary

differences arising from certain transactions under SKAS No. 16, such as elimination of

inter-company transactions through equity method, income (loss) is treated as separate

differences.

쪾Valuation method is used to determine fair value when the market price in the principal

or most advantageous market does not constitute fair value.

쪾When a foreign currency contract which was deemed a forecasted transaction and to

which cash flow hedge accounting was applied becomes a firm commitment, the fair

value hedge accounting may be applied rather than the cash flow hedge accounting.

쪾Upon application of the fair value hedge accounting, the effective portion of the

derivative’s gains (losses) that are initially reported as other comprehensive income

(loss) under cash flow hedge accounting may be subsequently reflected into earnings

when the forecasted transaction becomes a firm commitment.

쪾Upon the change from cash flow hedge accounting to fair value hedge accounting

when a forecasted transaction becomes a firm commitment, the reason for the change,

basis of determination and the impact of the change is disclosed in the financial

statements

The adoption of the above amended standards had no impact on net income for the years ended March 31, 2009 and 2008, respectively,

and net assets as of March 31, 2009 and 2008, respectively.

Financial Section

Revenue Recognition

Revenues from premium income are recognized at the time when such premium payments become due. However, in the case of insurance

contracts of which the first premium payment or lump-sum premium payment are uncollected as of the first day of the insured period due to

payment extension allowed by the Company, the first premium payment or lump-sum premium payment may be recognized as revenue in

the period in which the first day of insured period falls. If premium income is received before the nominated collection date, the Company

records unearned insurance premium based on calendar period calculation. The Company applies the accrual basis in recognizing interest

income related to deposits, loans and securities, except for non-secured uncollectible receivables. Interest on loans and collapsible

corporation’s securities, whose principal or interest is past due at the balance sheet date, is generally not accrued. When a loan is placed on

non-accrual status, previously accrued interest is generally reversed and deducted from the current interest income, and future interest

income is recognized on cash basis in accordance with the accounting standard.

Investment Securities other than those Accounted for Using the Equity Method

Debt and equity securities are initially stated at the market value of consideration given for acquisition (market value of securities acquired if

market value of consideration given is not available) plus incidental costs attributable to the acquisition of the securities and are classified into

trading, available-for-sale and held-tomaturity securities depending on the purpose and nature of acquisition. The Company presents trading

securities as short-term investments, and available-for-sale securities and held-to-maturity securities as short-term investments or long-term

investment securities depending on their nature in the balance sheet. The moving average method for equity securities and the specific

identification method for debt securities are used to determine the cost of securities for the calculation of gain (loss) on disposal of those

securities.

The following is the specific valuation method applied for debt and equity securities:

1) Trading securities

Securities that are bought and held principally for the purpose of selling them in the near term with active and frequent buying and selling,

including securities which consist of a portfolio of securities with the clear objective of generating profits on short-term differences in price,

are classified as trading securities. Trading securities are recorded at their fair value and unrealized gains or losses from trading securities are

recorded as gain (loss) on valuation of trading securities included in the non-operating income (expense).

2) Held-to-maturity security

Debt securities that have fixed or determinable payments with a fixed maturity are classified as held-to-maturity securities only if the Company

has both the positive intent and ability to hold those securities to maturity. However, debt securities, whose maturity dates are due within one

year from the balance sheet date, are classified as current assets.

After initial recognition, held-to-maturity securities are stated at amortized cost in the balance sheet. When heldto- maturity securities are

measured at amortized costs, the difference between their acquisition cost and face value is amortized using the effective interest rate

method and the amortization is included in the cost and interest income.



When the possibility of not being able to collect the principal and interest of held-to-maturity securities according to the terms of the

contracts is high, the difference between the recoverable amount (the present value of expected cash flows using the effective interest rate

upon acquisition of the securities) and book value is recorded as loss on impairment of held-to-maturity securities included in the non-

operating expense and the held-to-maturity securities are stated at the recoverable amount after impairment loss. If the value of impaired

securities subsequently recovers and the recovery can be objectively related to an event occurring after the impairment loss was recognized,

the reversal of impairment loss is recorded as reversal of impairment loss on held-to-maturity securities included in non-operating income.

However, the resulting carrying amount after the reversal of impairment loss shall not exceed the amortized cost that would have been

measured at the date of the reversal, if no impairment loss was recognized.

3) Available-for-sale securities

Debt and equity securities that do not fall under the classifications of trading or held-to-maturity securities are categorized and presented as

available-for-sale securities included in investment assets. However, if an available-for-sale security matures or it is certain that such security

will be disposed of within one year from the balance sheet date, it is classified as a current asset.

Available-for-sale securities are recorded at fair value. Unrealized gain or loss from available-for-sale securities are presented as gain or loss

on valuation of available-for-sale securities included in accumulated other comprehensive income under shareholders’ equity. In addition,

accumulated gain or loss on valuation of available-for-sale securities is reflected in either gain or loss on disposal of available-for-sale

securities or loss on impairment of available-for-sale securities upon disposal or recognition of impairment of the securities.

However, available-for-sale equity securities that are not marketable and whose fair value cannot be reliably measured are recorded at

acquisition cost.

When there is objective evidence that the available-for-sale securities are impaired and the recoverable amount is lower than the cost

(amortized cost for debt securities) of the available-for-sale securities, an impairment loss is recognized as loss on impairment of available-

for-sale securities in non-operating expense and the related unrealized gain or loss remaining in shareholders’ equity is adjusted to

impairment loss. If the value of impaired securities subsequently recovers and the recovery can be objectively related to an event occurring

after the impairment loss was recognized, the reversal of impairment loss can be recognized up to the previously recorded impairment loss

as a reversal of loss on impairment of available-for-sale securities in non-operating income.

However, if the fair value increases after the impairment loss is recognized but does not relate to the recovery of impairment loss as

described above, the increase in fair value is recorded in shareholders’ equity.

4) Reclassification of securities

Trading securities cannot be reclassified as other categories of securities. However, when those securities can no longer be held for sale in

the near-term to generate profits from short-term price differences, the trading securities can be reclassified as available-for-sale or held-to-

maturity securities. When those securities are no longer traded in an active market, such securities are reclassified as available-for-sale

securities.

When trading securities are reclassified to other categories, the fair value (latest market value) as of the date of the reclassification becomes

new acquisition cost of the security and the security’s unrealized holding gain or loss through the date of the reclassification is recorded in

the non-operating income or expenses.

Financial Section

Securities Accounted for Using the Equity Method

Investments in equity securities of companies, over which the Company exercises significant influence, are reported using the equity method

of accounting.

1) Accounting for changes in the equity of the investee

Under the equity method of accounting, the Company records changes in its proportionate equity of the net assets of the investee

depending on the nature of the underlying changes in the investee as follows: (i) “equity in income (loss) of associates” in the non-operating

income (expense) for net income (loss) of the investee; (ii) “increase (decrease) in retained earnings of associates” in the retained earnings for

changes in beginning retained earnings of the investee; (iii) “increase (decrease) in equity of associates” in accumulated other comprehensive

income (loss) for other changes in shareholders’ equity of the investee.

When the equity method investee’s unappropriated retained earnings carried over from prior period changes due to significant error

corrections, the Company records the changes in equity as “equity in income (loss) of associates” included in the non-operating income

(expense) if the impact of the changes on the Company’s nonconsolidated financial statements is not significant. If the changes results from

the changes in accounting policies of the equity method investee, they are reflected in unappropriated retained earnings carried over from

prior period in accordance with SKAS on changes in accounting policy and errors corrections. When the investee declares cash dividends,

the dividends to be received are deducted directly from securities accounted for using the equity method.

2) Treatment of Investment difference

Difference between the acquisition cost and the Company’s proportionate equity in the fair value of net assets of the investee upon

acquisition (“Investment difference”) is considered as (negative) goodwill and accounted for in accordance with accounting standards for

business combination. The goodwill portion is amortized over useful lives within 20 years on a straight line method while the negative

goodwill portion is amortized over the weighted average useful lives of depreciable non-monetary assets of the investee. The amortization is

included in “equity in income (loss) of associates”.

When the Company’s equity interest in the investee increases due to an increase (or decrease) in contributed capital with (or without)

consideration, the changes in the Company’s proportionate equity in the investee are accounted for as investment difference. If the

Company’s equity interest decreases, the changes are accounted for as “gain (loss) on sales of securities accounted for using the equity

method”. However, if the investee is the Company’s subsidiary, those changes are accounted for in the capital surplus (capital adjustments).

3) Difference between the fair value and book value of net asset of the investee

Upon acquisition of the securities accounted for using the equity method, the Company’s proportionate shares in the differences between

the fair values and book values of the identifiable assets and liabilities of the investee are amortized/reversed and included in “equity in

income (loss) of associates” in accordance with the investee’s methods of accounting for the assets and liabilities.

4) Elimination of unrealized gain or loss from intercompany transactions

The Company’s proportionate share in the gain (loss) arising from transactions between the Company and the investee, which remains in the

book value of assets held as of balance sheet date, is considered unrealized gain (loss) and adjusted to securities accounted for using the

equity method. If the investee is a subsidiary of the Company, unrealized gain (loss) from sale of an asset by the Company to the investee

(downstream transaction) is fully eliminated and adjusted to securities accounted for using the equity method.



5) Impairment loss on securities accounted for using the equity method

When there is objective evidence that the securities accounted for using the equity method is impaired and the recoverable amount is lower

than the carrying amount of the securities accounted for using the equity method, an impairment loss is recognized as “loss on impairment of

securities accounted for using the equity method” included in non-operating expense and the unamortized investment difference is first

reduced. When the recoverable amount is recovered after the recognition of impairment loss, the reversal of impairment loss is recognized

as income up to the previously recorded impairment loss. The book value of the securities accounted for using the equity method after the

reversal of the impairment loss cannot exceed the book value calculated as if the impairment loss would not been originally recognized. The

reversal of the impairment loss recognized against the unamortized investment difference is not allowed.

6) Translation of financial statements of overseas investees

For overseas investees whose financial statements are prepared in foreign currencies, the equity method of accounting is applied after

assets and liabilities are translated in accordance with the accounting treatments for the translation of the financial statements of overseas’

subsidiaries for consolidated financial statements. The Company’s proportionate share of the difference between assets net of liabilities and

shareholders’ equity after translation into Korean won is accounted for as “increase (decrease) in equity of associates” included in

accumulated other comprehensive income (loss).

Allowance for Loan Losses

In accordance with the Regulation on Supervision of Insurance Business (the “Supervisory Regulation”) legislated by the Korean Financial

Supervisory Service (FSS) and the Company’s analysis of its assets and estimated loss on uncollectible accounts computed using past

collection experience, the Company classifies all credits into five categories as normal, precautionary, substandard, doubtful or estimated

loss, based on borrowers’ repayment capability and historical financial transaction records. The Supervisory Regulation also requires the

Company to provide the minimum rate of loss provision for each category balance using the prescribed minimum percentages of 0.5

percent (individual loan is 0.75 percent) or more, 2 percent (individual loan is 5 percent) or more, 20 percent or more, 50 percent or more

and 100 percent, respectively.

However, the Company does not provide allowances for loans to the Korean government and local government entities, and call loans,

which are classified as normal, in accordance with the Accounting Standards for the Insurance Industry.

Troubled Debt Restructurings

The difference between the face value of the restructured receivable (payables) is recognized as bad debt expense or income for

circumstances in which contractual terms such as those on the face amount, interest rate, or maturity, have been modified to alleviate the

debtor’s burdens, as a result of an agreement between the creditor and the debtor or of an initiation of corporate reorganization procedures

under court trustee or under debtor’s management.

Property and Equipment

Property and equipment are stated at cost, except in the case of revaluation made in accordance with the Asset Revaluation Law on January

1, 1999. In addition, property and equipment acquired by investment in kind, donation, and free charge are stated at fair value. Significant

additions or improvements extending the useful lives of assets are capitalized. However, normal maintenance and repairs are charged to

expense as incurred.

Financial Section

The Company assesses any possible recognition of impairment loss when there is on indication that expected future economic benefits of a

tangible asset is considerably less than its carrying amount, as s result of technological obsolescence, rapid decline in market value or other

causes of impairment. When it is determined that an asset may have been impaired and that its estimated total future cash flows from

continued use or disposal is less than its carrying amount, the carrying amount of a tangible asset is reduced to its recoverable amount and

the difference is recognized as an impairment loss. If the recoverable amount of the impaired asset exceeds its carrying amount in

subsequent reporting period, the amount equal to the excess is treated as the reversal of the impairment loss, however, it can not exceed

the carrying amount that would have been determined had no impairment loss been recognized.

Interest costs on borrowings for property and equipment are expensed as incurred.

Depreciation is computed by the declining-balance method (straight-line method for buildings and structures purchased from January 1,

1995) using the rates based on the useful lives of the respective assets as follows:

Development Costs and Other Intangible Assets

Expenditure on development incurred in conjunction with new software, in which the elements of cost can be identified and future economic

benefits are clearly expected, is capitalized and amortized on a straight-line basis over the expected periods to be benefited.

Other intangible assets, which are acquired by the Company, are stated at cost less accumulated amortization and impairment losses. Such

assets are amortized using the straight-line method over a reasonable period, based on the nature of the assets as follows:

Insurance Reserves

In accordance with Article 120 of the Insurance Business Law, the Company is required to maintain insurance reserves determined as

follows:

1) Reserve for outstanding claims

Reserve for outstanding claims is based on the accumulation of estimates for losses reported and incurred but not reported (IBNR) prior to

the balance sheet date on the direct business written by the Company and estimates received from ceding companies.

Useful lives (years)

Buildings

Structures

Equipment

Vehicles

10-60

15-25

4-20

4

Useful lives (years)

Goodwill

Development cost

Software

Others

5

5

4

4



In accordance with the amended Regulation on Supervision of Insurance Business and Enforcement Rules of Supervision of Insurance

Business, the Company is required to report IBNR against long-term non-life insurance as reserve for outstanding claims.

2) Long-term insurance premium reserve

The Company maintains a reserve for the portion of premiums (and investment income on such portion), which is refundable to policyholders

upon maturity and cancellation of the policy under long-term deposit-type insurance, unless there has been a substantial claim for payment

under the policy.

3) Unearned premium reserve

The Company is required to maintain an unearned premium reserve at amounts determined based on lines of insurance and types of policy.

4) Reserves for participating policyholder dividend

The Company is required to maintain a reserve for participating policyholder dividend based on the regulations approved by the Governor of

the Financial Supervisory Service.

5) Excess participating policyholder dividend reserve

Pursuant to relevant laws and contracts, the Company may establish excess participating policyholder dividend reserve depending on the

operating results of related insurance products. The reserve may be used to pay participating policyholder dividend or additional dividend.

Catastrophe Reserves

Catastrophe reserves are required based on the regulations approved by the Governor of the Financial Supervisory Service. Non-life

insurance companies may establish a catastrophe reserve amounting to 35%~100% multiplied net cash premiums by reserve basic rate for

each type of insurance products in proportion to underwriting profit for the year, if any, up to 50% (in case of car insurance, 40%) of the

current year earned premiums. These reserves can be used against exceptionally large claims in the future.

Compensation Receivables

The Company recognizes compensation receivables according to Accounting Standards for the Insurance Industry and Insurance

Supervisory Regulations. Compensation receivables are calculated by multiplying the average recovery ratio (recovery amount/net claims) for

the last 3 years from the prior year balance sheet date to the amount of net claims for the last year from the prior year balance sheet date

claimed.

Accrued Severance Indemnities

In accordance with the Company's policy, all employees with more than one year of service are entitled to receive lump-sum severance

payments upon termination of their employment, based on their current rates of salary and length of service. The accrual for severance

indemnities is computed as if all employees were to terminate at the balance sheet dates. Otherwise, the Company provides defined

contribution benefit plan to its employees and benefit plan asset or pension asset placed to reserve in Samsung Life Insurance Co., Ltd.

which is deducted from accrued severance indemnities. If an employee’s service period met the requirement to receive the benefit payment

and elected to be the recipient of such severance payment upon termination, present value of total severance liability to be paid to the

terminated employee subsequent to the balance sheet date is estimated, recorded as severance payable and deducted from accrued

severance indemnities.

Financial Section

Separate Account Assets and Liabilities

In accordance with Article No.108 of the Insurance Business Law and Article 34 of the Labor Standards Act, all assets and liabilities related

to retirement benefit insurance are managed and accounted for separately. According to the amended Article No.4-1 of the Regulation on

Supervision of Insurance Business, the Company has changed the presentation of separate account assets (liabilities). Until March 31,

2007, due from (to) separate account had been presented as an asset (liability), however from April 1, 2007, due from (to) separate account

has been presented as a deduction from separate liabilities (assets). As a result, total assets (liabilities) decreased by ￦53,402 million

($38,779 thousand) as of March 31, 2008. Such restatement had no impact on net assets.

Deferred Acquisition Costs

Deferred acquisition costs are equally amortized over the period of premium payment of insurance contracts or over seven years for

insurance contracts of which premium payment period exceeds seven years. Further, if the insurance contracts are surrendered or have

lapsed, the related unamortized balance of deferred acquisition costs is charged to current operations.

Premium Deficiency

When the pre-assumed interest rate to be applied in accumulating premium reserve is higher than the interest rate for one year time deposits

and this situation is expected to continue for a long period, the Company is considered to have a premium deficiency. This situation is

becoming more common given the current low interest rate environment in Korea. The above reserve for premium deficiency is initially offset

against any unamortized deferred acquisition costs and then against the excess dividend reserve. The remaining balance, if any, is charged

to current operations.

Accounting for Foreign Currency Transactions and Translation

The Company maintains its accounts in Korean won. Transactions in foreign currencies are recorded in Korean won based on the prevailing

rates of exchange on the transaction date. Monetary accounts with balances denominated in foreign currencies are recorded and reported

in the accompanying financial statements at the exchange rates prevailing at the balance sheet dates. The balances have been translated

using the basic rate announced by Seoul Money Brokerage Services, Ltd., and the resulting translation gains and losses are reflected in

current operations. For overseas subsidiaries and branches whose financial statements are prepared in foreign currencies, assets and

liabilities are translated at the exchange rate at the balance sheet date and statement of income items are translated at the average

exchange rate for the respective fiscal year.

Income Tax

Income tax on the earnings for the year comprises current and deferred taxes. Income tax is recognized in the statement of income, except

to the extent that it relates to items recognized directly to equity, in which case it is recognized in equity.

Deferred taxes are provided using the asset and liability method, providing for temporary differences between the carrying amounts of assets

and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred taxes provided is based

on the expected realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date.



Deferred tax assets are recognized only to the extent that it is probable that future taxable earnings will be available against which the unused

tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit

will be realized.

In conformity with the amended SKAS No.16 “Income Taxes”, The Company had included additional income tax or tax refunds for the prior

periods in income tax expense for the current period from April 1, 2008. As a result, income tax expense decreased by ￦1,020 million

($741 thousand) for the year ended March 31, 2009, but there was no impact on net income for the year ended March 31, 2008.

Derivatives

Derivative instruments are presented as assets or liabilities valued principally at fair value of the rights or obligations associated with the

derivative contracts. The unrealized gain or loss from derivative transactions is recognized in current operations.

However, it is considered for all portion of the hedge to be effective when evaluating the hedge effectiveness provided that the maturity, the

contract amount, and the timing of the cash flows between the hedged items and the hedging instruments are agreed with the principal

contents of the hedge contract.

Stock Options

The stock option program allows the Company’s employees to acquire shares of the Company. The option exercise price is generally fixed

below the market price of underlying shares at the date of the grant. The Company values stock options based on option pricing model

under the fair value method and recognizes this value as an expense over the period in which the options vest. When the options are

exercised, equity is increased by the amount of the proceeds received, and the difference between the exercise price and market price is

included in compensation cost and credited to the capital adjustment account.

Contingent Liabilities

Contingent losses are generally recognized as a liability when probable and reasonably estimable.

Recognition of Liabilities on Expired Insurance

The payment obligation is actually granted to the Company in view of the public character of insurance transaction and the practice of

insurance industries, even though the extinctive prescription of insurance payment expired. Until March 31, 2007, in case of long-term and

automobile insurance, the Company had recognized difference in amount between actual insurance payment and expected insurance

payment based on insurance payment empirical rate as liabilities. However, since April 1, 2007, the Company has recognized liabilities on

the entire insurance payment of which extinctive prescription of insurance payment expired because of contribution to Microfinance

foundation based on the Law of Establishment of Microfinance Foundation. This change decreased net income by ￦10,546 million ($7,658

thousand) for the year ended March 31, 2008.

Reclassification of Accounts in the Prior Financial Statements

The Company reclassified some accounts in the prior financial statements in accordance with the Company’s current financial statements for

comparative purposes. This reclassification does not affect the reported net income or net assets in the prior financial statements.

Financial Section

20092009 20082008

3. CASH AND DUE FROM BANKS:

Restricted due from banks as of March 31, 2009 and 2008 are as follows:

4. TRADING SECURITIES:

Trading securities as of March 31, 2009 and 2008 are as follows (Unit: Won in millions):

As the trading securities are valued at fair value, the gains on valuation of trading securities amounted to ￦991 million ($720 thousand) and

the losses on valuation of trading securities amounted to ￦9 million ($7 thousand) for the year ended March 31, 2009.


Deposits for maintenance of checking accounts ￦11 ￦11 $ 8 $ 8

Collateral for swap 36,595 4,046 26,574 2,938

Collateral for CLN 110,168 - 80,000 -

Collateral for guarantee deposits 524 445 381 323

￦147,298 ￦4,502 $106,963 $ 3,269


2009

Government and public

bonds ￦9,391 ￦9,726 ￦335 ￦9,222

Special bonds 9,999 10,009 10 -

Financial company bonds - - - 9,976

Corporate bonds 2,104 2,095 (9) -

Beneficiary certificates 120,000 120,105 105 120,281

Securities denominated

in foreign currencies 86,033 86,574 541 58,589

￦227,527 ￦228,509 ￦982 ￦198,068

Translation into

U.S. Dollars (In thousands) (Note 2) $ 165,222 $ 165,935 $ 713 $ 143,830

2008

Fair value Valuation gain(loss)

Book valueBook valuebefore valuation


20092009 20082008


5. AVAILABLE-FOR-SALE SECURITIES:

(1) Available-for-sale securities as of March 31, 2009 and 2008 are as follows:

(2) Changes in gain (loss) on valuation of available-for-sale securities recorded as accumulated other comprehensive income (before

deferred taxes), all of which are stated at fair value for the year ended March 31, 2009, are as follows (Unit: Won in millions):

(3) For the years ended March 31, 2009 and 2008, the Company recorded impairment loss on available-for-sale securities amounting to

￦9,033 million ($6,559 thousand) and ￦6,811 million ($4,946 thousand), respectively, which are not expected to be recovered. The

Company also recorded reversal of impairment loss amounting to ￦2,936 million ($2,132 thousand) whose fair value were recovered for the

year ended March 31, 2008.


Equity securities ￦1,424,883 ￦1,598,510 $ 1,034,698 $ 1,160,782

Investments in partnerships 25,337 12,508 18,399 9,083

Government and public bonds 1,883,192 2,232,782 1,367,506 1,621,367

Special bonds 3,625,997 2,831,033 2,633,067 2,055,795

Financial company bonds 1,442,242 1,159,420 1,047,304 841,930

Corporate bonds 1,917,973 1,701,592 1,392,762 1,235,635

Beneficiary certificates 516,472 443,227 375,043 321,856

Securities denominated in foreign currencies 847,190 557,696 615,199 404,980

Others 1,176,246 1,088,583 854,147 790,480

￦12,859,532 ￦11,625,351 $ 9,338,125 $ 8,441,908


Equity securities ￦1,379,038 ￦ (180,812) ￦ (166) ￦- ￦1,198,392

Government and public bonds (16,868) 28,038 (5,718) - 16,888

Special bonds (60,208) 111,680 (9,769) 8,383 69,624

Financial company bonds - 21,577 (216) (8,383) 13,410

Corporate bonds (15,007) 38,771 (1,830) - 25,594

Beneficiary certificates 69,513 (71,380) 2,715 - (4,582)

Securities denominated in foreign currencies 20,236 51,230 351 - 71,115

Others (7,855) 23,362 206 - 15,301

￦1,368,849 ￦22,466 ￦ (14,427) ￦- ￦1,405,742

Translation into

U.S. Dollars (In thousands) (Note 2) $ 994,008 $ 16,314 $ (10,476) $ - $ 1,020,798

DescriptionBeginning

balanceGain(loss) on

ValuationRealized on

disposalOthers Ending balance

Financial Section

20092009 20082008

(4) Maturities of debt securities included in available-for-sale securities as of March 31, 2009 are as follows (Unit: Won in million):

For the year ended March 31, 2009, the Company recognized interest income amounting to ￦4,501 million ($3,268 thousand) and

￦560,702 million ($407,162 thousand) related to trading securities and available-forsale securities, respectively.

(5) Available-for-sale securities pledged as collateral as of March 31, 2009 and 2008 are as follows:

In addition, the Company has lent government bonds to Hana Daetoo Securities Co., Ltd. amounting to ￦40,810 million ($29,635

thousand).

Within 1 year ￦439,233 ￦442,344 ￦37,000 ￦37,392

Within 1 - 5 years 4,834,052 4,883,669 532,299 524,213

Within 5 - 10 years 3,195,878 3,219,383 1,001,264 945,540

More than 10 years 316,000 324,008 322,542 318,908

￦8,785,163 ￦8,869,404 ￦1,893,105 ￦1,826,053

Translation into

U.S. Dollars (In thousands) (Note 2) $ 6,379,466 $ 6,440,639 $ 1,374,704 $ 1,326,013

Face valueFace value Book valueBook value


KSFC (*) ￦25,976 ￦- $ 18,863 $ -

UBS (**) 65,418 43,595 47,504 31,657

ABN AMRO (**) 60,993 8,541 44,291 6,202

JP Morgan chase (**) 10,183 - 7,395 -

Standard Chartered First Bank Korea (**) 46,122 - 33,492 -

Calyon (**) 30,829 - 22,387 -

￦239,521 ￦52,136 $ 173,932 $ 37,859


Maturities

Description

Bonds (*) Securities (**)

(*) Bonds consist of government and public bonds, special bonds, financial company bonds and corporate bonds.

(**) Securities consist of securities denominated in foreign currencies and others.

(*) As of March 31, 2009, the Company pledged available-for-sale securities for bond sold under repurchase agreements.

(**) As of March 31, 2009 and 2008, the Company pledged available-for-sale securities for foreign currency swap.

6. HELD-TO-MATURITY SECURITIES:

Held-to-maturity securities as of March 31, 2009 and 2008 are as follows (Unit: Won in millions):

Within 5 years Others ￦20,000 ￦20,000

Special bonds 50,000 49,960

Within 5 - 10 years Special bonds 60,000 60,186

￦130,000 ￦130,146

Translation into

U.S. Dollars (In thousands) (Note 2) $ 94,401 $ 94,507

2009Maturities Type Acquisition cost Book value



7. SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD:

(1) Securities accounted for using the equity method as of March 31, 2009 and 2008 consist of the following (Unit: Won in millions, dollars in

thousands):

For the years ended March 31, 2009 and 2008, the Company recognized interest income amounting to ￦5,371 million ($3,900 thousand)

and ￦621 million ($451 thousand) related to held-to-maturity securities.

2009

Within 5 years Others ￦20,000 ￦20,000

Translation into


2008Maturities Type Acquisition cost Book value

P.T Asuransi Samsung Tugu 70.00 ￦3,761 ￦6,430 ￦6,430 $ 4,669

Samsung Claim adjustment Service Co., LTD. 96.79 880 1,984 1,984 1,441

Anycar Claim Adjustment Service 100.00 250 682 682 495

Macquarie Central (*) 4.98 3,800 2,905 2,905 2,110

KOCREPVII (*) 4.83 2,900 2,864 2,864 2,080

New Airport Hiway (*) 1.38 3,042 4,412 4,412 3,204

KRII (**) 14.00 3,570 3,340 3,340 2,425

Samsung Vina Insurance 50.00 7,119 8,712 8,712 6,326

Samsung Fire & Marine

Insurance Company(China), LTD 100.00 32,594 87,686 87,686 63,674

￦57,916 ￦119,015 ￦119,015 $86,424

Investees Ownershipratio (%)

Acquisitioncost

Equity innet asset value Book value

Translation intoU.S.Dollars (Note 2)

2008

P.T Asuransi Samsung Tugu 70.00 ￦3,761 ￦4,677 ￦4,677 $ 3,396

Samsung Claim adjustment Service Co., LTD. 96.79 880 1,047 1,047 760

Anycar Claim Adjustment Service 100.00 250 661 661 480

Macquarie Central (*) 4.98 3,800 3,795 3,795 2,756

KOCREPIII (*) 4.71 3,200 3,240 3,240 2,353

KOCREPVII (*) 4.83 2,900 2,880 2,880 2,091

New Airport Hiway (*) 1.38 3,042 3,772 3,772 2,739

Samsung Vina Insurance 50.00 3,031 2,887 2,887 2,096


Insurance Company(China), LTD 100.00 32,594 50,974 50,974 37,016

￦53,458 ￦73,933 ￦73,933 $53,687

Investees Ownershipratio (%)

Acquisitioncost

Equity innet asset value Book value

Translation intoU.S.Dollars (Note 2)

(*) The equity method has been applied as the Company is able to exercise significant influence over the operating and financial policies of the investees, which the

employees of the Company hold position as directors of the investees.

(**) Disposal is restricted as the Company had participated as a promoter of the investee.

Financial Section

2009

P.T Asuransi Samsung Tugu ￦4,677 ￦1,810 ￦ (57) ￦6,430

Samsung Claim adjustment Service Co., LTD. 1,047 937 - 1,984

Anycar Claim Adjustment Service 661 21 - 682

Macquarie Central 3,795 656 (1,546) 2,905

KOCREPIII 3,240 - (3,240) -

KOCREPVII 2,880 306 (322) 2,864

New Airport Hiway 3,772 640 - 4.412

KRII - (230) 3,570 3,340

Samsung Vina Insurance 2,887 889 4,936 8,712


Insurance Company(China), LTD 50,974 12,824 23,888 87,686

￦73,933 ￦17,853 ￦27,229 ￦119,015

Translation into

U.S. Dollars (In thousands) (Note 2) $53,687 $12,964 $19,773 $86,424

InvesteesBeginning book

valueGain (loss) on

valuationOther increase

(decrease)Ending

book value

For the year ended March 31, 2009, the Company recognized gain on sales of securities accounted for using the equity method amounting

to ￦6,951 million ($5,047 thousand) related to disposal of KOCREPIII.

(2) The valuation of securities accounted for using the equity method for the years ended March 31, 2009 and 2008 was as follows (Unit:

Won in millions):

2008

P.T Asuransi Samsung Tugu ￦3,591 ￦949 ￦137 ￦4,677

Samsung Claim adjustment Service Co., LTD. 1,926 (879) - 1,047

Anycar Claim Adjustment Service 536 125 - 661

Macquarie Central 3,804 539 (548) 3,795

KOCREPII 84 - (84) -

KOCREPIII 3,346 275 (381) 3,240

KOCREPVII 2,901 282 (303) 2,880

New Airport Hiway 3,138 661 (27) 3,772

Samsung Vina Insurance 2,445 73 369 2,887

Samsung Venture Investment 3,744 - (3,744) -


Insurance Company(China), LTD 37,142 6,614 7,218 50,974

￦62,657 ￦8,639 ￦2,637 ￦73,933

Translation into

U.S. Dollars (In thousands) (Note 2) $ 45,499 $ 6,273 $ 1,915 $ 53,687

InvesteesBeginning book

valueGain (loss) on

valuationOther increase

(decrease)Ending

book value



Investees

(4) The market price of listed equity securities as of March 31, 2009 is as follows:

In addition, for valuation of securities accounted for using the equity method, the Company used the financial statements based on audited

or reviewed financial statements as of March 31, 2009.

(3) The summarized financial information of investees of which securities are accounted for using the equity method as of and for the year

ended March 31, 2009 is as follows:


P.T Asuransi Samsung Tugu ￦14,023 ￦4,837 ￦18,343 ￦2,586

Samsung Claim adjustment Service Co., LTD. 8,465 6,415 75,973 969

Anycar Claim Adjustment Service 3,972 3,290 37,734 21

Macquarie Central (*) 172,664 114,332 26,502 12,286

KOCREPVII 125,908 66,652 15,654 6,325

New Airport Hiway 1,149,028 830,226 218,676 46,241

KRII 35,798 11,942 7,056 (214)

Samsung Vina Insurance 28,566 11,141 18,907 1,778

Samsung Fire & Marine Insurance

Company(China), LTD 113,783 26,097 66,768 12,824

SalesTotal assets Net income (loss)Total liabilities

(*) For Macquarie Central, the Company decreased the securities accounted for using the equity method since it received dividend after the settling day of the investee.

Investees

Korea Won / In millions, except price pershare and number of shares)

Translation into U.S.Dollars (Note 2) / (In thousands)

Macquarie Central ￦7,630 760,000 ￦5,799 $ 4,211

KOCREPVII 5,710 580,000 3,312 2,405

KRII 4,760 700,000 3,332 2,420

Market valuePrice per share Market valueNumber of shares

8. DISCRETIONARY ASSET MANAGEMENT CONTRACTS AND OTHERS:

(1) Discretionary asset management contracts

The Company has entered into discretionary asset management contracts with investment trust management company (Samsung Trust

Investment Corporation), in order to manage trading securities and available-for-sale securities amounting to ￦9,726 million ($7,063

thousand) and ￦7,124,122 million ($5,173,279 thousand), respectively, as of March 31, 2009.

The Company entrusts Prudential Financial, Inc. with the management of foreign investment securities among trading securities according to

the discretionary asset management contracts. All foreign investment securities are foreign bonds of which book value is ￦86,574 million

($62,867 thousand), and the gain amounting to ￦541 million ($393 thousand) and ￦1,021 million ($741 thousand) from foreign investment

securities are reflected in the income statements for the years ended March 31, 2009 and 2008, respectively, as gain on valuation for

trading securities.

Financial Section

(2) Private equity fund

The Company presents private equity fund as beneficiary certificates under available-for-sale securities. Private equity fund as of March 31,

2009 and 2008 consist of the following:

For the years ended March 31, 2009 and 2008, the Company recognized gain on valuation of beneficiary certificates as accumulated other

comprehensive income amounting to ￦4,838 million ($3,513 thousand) and ￦71,481 million ($51,907 thousand), respectively, related to

private equity fund.

In addition, main assets of private equity fund as of March 31, 2009 are as follows:

Description

2009 2008

Beneficiary certificates ￦231,723 ￦237,112 ￦261,717 ￦333,198

Translation into U.S. Dollars

(In thousands)(Note 2) $ 168,269 $ 172,182 $ 190,049 $ 241,956

Acquisition costAcquisition cost Fair valueFair value

In millionsIn millions

Description Korea Won / In millions Translation into U.S. Dollars (Note 2) / (In thousands)

Equity securities ￦104,295 $ 75,735

Bank deposits 54,945 39,899

Fixed deposits 9,670 7,022

Bonds 63,950

46,438

Derivatives 1,765 1,282

Other assets and liabilities, net 2,487 1,806

￦237,112 $ 172,182



9. LOANS:

(1) In accordance with the Insurance Business Act and the Regulation on Supervision of Insurance Business, the Company provides various

loans. Loans as of March 31, 2009 bear an annual interest rate ranging from 4.64% to 14.5%. Ratios of allowance for loan losses are

0.96%, 1.11% and 1.29% in 2009, 2008 and 2007, respectively.

(2) Loans as of March 31, 2009 and 2008 are summarized as follows:

(3) Loans by maturity as of March 31, 2009 and 2008 are as follows:



Policy loans ￦1,635,148 ￦1,463,489 $ 1,187,385 $ 1,062,734

Loans secured by real estate 2,375,986 2,101,754 1,725,355 1,526,217

Unsecured loans 174,005 128,849 126,356 93,565

Loans secured by third party guarantees 2,205 3,084 1,601 2,239

Other loans 576,062 464,601 418,316 337,376

4,763,406 4,161,777 3,459,013 3,022,131

Allowance for loan losses (40,229) (39,499) (29,213) (28,683)

Deferred loan origination fees (2,839) (2,236) (2,062) (1,623)

￦4,720,338 ￦4,120,042 $ 3,427,738 $ 2,991,825


20092009 20082008

2009

Policy loans ￦83,423 ￦88,664 ￦104,445 ￦161,185 ￦1,197,431 ￦1,635,148

Loans secured by real estate 132,512 91,726 117,593 186,951 1,847,204 2,375,986

Unsecured loans 18,707 51,096 33,578 70,446 178 174,005

Loans secured by

third party guarantees 741 371 468 625 - 2,205

Other loans 74,701 31,581 42,000 24,974 402,806 576,062

￦310,084 ￦263,438 ￦298,084 ￦444,181 ￦3,447,619 ￦4,763,406

Translation into

U.S. Dollars (In thousands) (Note 2) $ 225,172 $ 191,299 $ 216,458 $ 322,548 $ 2,503,536 $ 3,459,013

Within 1 - 2years

Within 2- 3years

Within 3- 5years

More than 5years

TotalWithin 1

year

Financial Section

(4) Loans to employees as of March 31, 2009 and 2008 are as follows:

(5) Loans by forward looking criteria as of March 31, 2009 and 2008 are summarized as follows:

Korea Won / In millions2008

Policy loans ￦83,749 ￦81,940 ￦81,048 ￦160,629 ￦1,056,123 ￦1,463,489

Loans secured by real estate 176,820 51,232 46,375 120,651 1,706,676 2,101,754

Unsecured loans 41,741 17,429 38,651 30,499 529 128,849

Loans secured by

third party guarantees 891 415 154 1,561 63 3,084

Other loans 37,519 62,863 686 83,395 280,138 464,601

￦340,720 ￦213,879 ￦166,914 ￦396,735 ￦3,043,529 ￦4,161,777

Translation into

U.S. Dollars (In thousands) (Note 2) $ 247,418 $ 155,311 $ 121,207 $ 288,095 $ 2,210,100 $ 3,022,131

Within 1 - 2years

Within 2- 3years

Within 3- 5years

More than 5years

TotalWithin 1year


Policy loans ￦1,635,148 ￦- ￦- ￦- ￦- ￦1,635,148

Loans secured by real estate 2,356,897 4,232 11,343 1,006 2,508 2,375,986

Unsecured loans 173,835 30 - 76 64 174,005

Loans secured by third party guarantees 2,196 9 - - - 2,205

Other loans 575,895 - - 167 - 576,062

4,743,971 4,271 11,343 1,249 2,572 4,763,406

Insurance receivables (*) 100,853 8,184 526 4,045 2,218 115,826

Other receivables 118,202 111 308 2,371 123 121,115

Accrued income 22,261 94 - - - 22,355

Notes receivable 2,496 - - - - 2,496

Other assets (**) - - 270 - - 270

243,812 8,389 1,104 6,416 2,341 262,062

Total ￦4,987,783 ￦12,660 ￦12,447 ￦7,665 ￦4,913 ￦5,025,468

Translation into U.S. Dollars

(In thousands) (Note 2) $ 3,621,947 $ 9,193 $ 9,038 $ 5,566 $ 3,568 $ 3,649,312

Precautionary Substandard Doubtful Loss TotalNormal


Loans secured by real estate ￦27,647 ￦25,525 $ 20,076 $ 18,535

Unsecured loans 32,306 31,707 23,459 23,024

Loans secured by third party guarantees 1,801 2,491 1,308 1,809

Other loans 29 29 21 21

￦61,783 ￦59,752 $ 44,864 $ 43,389


20092009 20082008




Policy loans ￦1,464,489 ￦- ￦- ￦- ￦- ￦1,464,489

Loans secured by real estate 2,079,437 5,209 11,115 1,812 4,181 2,101,754

Unsecured loans 128,527 70 - 117 135 128,849

Loans secured by third party guarantees 3,077 7 - - - 3,084

Other loans 464,421 - 2 178 - 464,601

4,138,951 5,286 11,117 2,107 4,316 4,161,777

Insurance receivables (*) 79,811 5,775 313 3,616 2,531 92,046

Other receivables 117,813 6 137 3,999 219 122,174

Accrued income 19,666 139 - - - 19,805

Notes receivable 907 - - - - 907

Other assets (**) - - 258 - - 258

218,197 5,920 708 7,615 2,750 235,190

Total ￦4,357,148 ￦11,206 ￦11,825 ￦9,722 ￦7,066 ￦4,396,967

Translation into

U.S. Dollars (In thousands) (Note 2) $ 3,164,003 $ 8,137 $ 8,587 $ 7,060 $ 5,131 $ 3,192,918

Precautionary Substandard Doubtful Loss TotalNormal

(*) Net of insurance payables

(**) The Company reserves allowance for doubtful accounts for credit provisional payment.

(6) Loans classified as loss but haven’t met its extinctive prescription or lost its claim are as follows:

2009 2008

Loans ￦2,572 ￦2,572 ￦4,316

￦4,316

Insurance receivables 2,217 938 2,531 2,010

Other receivables 123 123 219 -

￦4,912 ￦3,633 ￦7,066 ￦6,326

Translation into

U.S. Dollars (In thousands)(Note 2) $ 3,567 $ 2,638 $ 5,131 $ 4,594

LoansLoans ClaimClaim

In millionsIn millions

Financial Section

20092009 2008

10. PROPERTY AND EQUIPMENT:

(1) The details of property and equipment as of March 31, 2009 and 2008 are as follows:

As of March 31, 2009 and 2008, the published value of land is ￦518,328 million ($376,391 thousand) and ￦453,718 million

($329,474 thousand), respectively, based on the disclosed public land price announced by the government pursuant to the Laws

on Disclosure of Land Price and Valuation of Land.

(2) The change in property and equipment for the year ended March 31, 2009 is as follows (Unit: Won in millions):

In addition, depreciation for the year amounting to ￦47,860 million ($34,754 thousand), ￦495 million ($360 thousand) and

￦7,705 million ($5,595 thousand) is charged in selling and general operating expenses, investment administrative expenses and

depreciation expense on investments, respectively.


Land ￦411,998 ￦348,151 $ 299,178 $ 252,815

Buildings 810,059 713,633 588,235 518,214

Structures 2,826 2,825 2,052 2,051

Furniture and other equipment 328,203 382,140 238,329 277,496

Vehicles 1,791 2,092 1,301 1,519

Construction in progress 3,493 94,876 2,536 68,896

1,558,370 1,543,717 1,131,631 1,120,991

Accumulated depreciation (416,024) (450,051) (302,101) (326,811)

￦1,142,346 ￦1,093,666 $ 829,530 $ 794,180


2008

Land ￦348,151 ￦1,747 ￦- ￦- ￦62,100 ￦411,998

Buildings 591,307 9,719 - 17,797 86,709 669,938

Structures 2,132 - - 93 - 2,039

Furniture and other equipment 56,862 36,999 1,436 37,922 - 54,503

Vehicles 338 285 - 248 - 375

Construction in progress 94,876 57,426 - - (148,809) 3,493

￦1,093,666 ￦106,176 ￦1,436 ￦56,060 ￦- ￦1,142,346

Translation into

U.S. Dollars (In thousands) (Note 2) $ 794,180 $ 77,101 $ 1,042 $ 40,709 $ - $ 829,530

Acquisition Disposal DepreciationTransfer from

other accountsEnding

book valueBeginning

book value


20092009 2008

2009 2008


11. INTANGIBLE ASSETS:

The details of intangible assets as of March 31, 2009 and 2008 are as follows:

12. INSURANCE RECEIVABLES AND INSURANCE PAYABLES:

Insurance receivables and insurance payables as of March 31, 2009 and 2008 are as follows:


Goodwill ￦53 ￦133 $ 39 $ 97

Development cost 62,171 62,070 45,146 45,073

Software 20,226 16,182 14,687 11,750

Others 34 55 25 40

￦82,484 ￦78,440 $ 59,897 $ 56,960



Insurance receivables:

Insurance receivable ￦87,398 ￦78,395 $ 63,465 $ 56,927

Due from agents 580 546 421 396

Co-insurance receivable 1,525 1,355 1,107 984

Receivables related to agency business 11,439 17,755 8,307 12,893

Reinsurance accounts receivable 69,939 72,402 50,787 52,576

Overseas reinsurance premiums receivable 39,974 19,013 29,028 13,807

Deposits on reinsurance treaty ceded 5,737 4,017 4,166 2,917

216,592 193,483 157,281 140,500

Less: Allowance for doubtful accounts (5,013) (4,916) (3,640) (3,569)

￦211,579 ￦188,567 $ 153,641 $ 136,931

Insurance payables:

Claims payable ￦39,599 ￦46,295 $ 28,755 $ 33,617

Due to agents 40,206 34,591 29,196 25,119

Premiums refund payable 6,325 3,796 4,593 2,757

Payables related to agency business 29,564 28,397 21,468 20,621

Reinsurance accounts payable 88,212 84,620 64,056 61,448

Overseas reinsurance premiums payable 51,695 34,949 37,539 25,379

Deposits on reinsurance treaty ceded 19,144 20,499 13,902 14,886

￦274,745 ￦253,147 $ 199,509 $ 183,827


2009 2008

2008

Financial Section

13. COMPENSATION RECEIVABLES:

Compensation receivables as of March 31, 2009 and 2008 are as follows:

14. INSURED ASSETS:

Insured assets of the Company as of March 31, 2009 are as follows:

In addition, the Company is insured against various indemnity liabilities.


Fire insurance ￦561 ￦556 $ 408 $ 404

Marine insurance 2,749 2,246 1,996 1,631

Automobile insurance 96,734 102,519 70,245 74,446

Special insurance 2,362 2,450 1,715 1,779

Guarantee insurance 835 843 606 612

Overseas insurance 285 107 207 77

Long-term insurance 2,107 1,142 1,530 829

Pension insurance (33) (24) (24) (17)

￦105,600 ￦109,839 $ 76,683 $ 79,761


20092009 20082008


Packag Office buildings & structures ￦1,226,510 $ 890,647


Type Insured assets Insured amount Insured amount


General Automobile Long-term Pension Total



15. POLICY RESERVES:

(1) Policy reserves as of March 31, 2009 are summarized as follows:

(2) Policy reserves as of March 31, 2008 are summarized as follows:


Outstanding claims ￦430,336 ￦612,050 ￦372,821 ￦16,004 ￦1,431,211

Long-term insurance - - 9,602,254 3,062,020 12,664,274

Unearned premiums 592,947 1,408,838 20,896 6,987 2,029,668

Participating policyholders’ dividends - - 5,763 158,128 163,891

Excess participating policyholders’ dividends - - 2,100 24,439 26,539

Reserve for reinsurance Premiums (558,270) (999) (8,443) (140) (567,852)

￦465,013 ￦2,019,889 ￦9,995,391 ￦3,267,438 ￦15,747,731




Outstanding claims $ 312,493 $ 444,448 $ 270,729 $ 11,622 $ 1,039,292





Reserve for reinsurance Premiums (405,395) (725) (6,131) (102) (412,353)

$ 337,675 $ 1,466,770 $ 7,258,290 $ 2,372,695 $ 11,435,430


Outstanding claims ￦459,895 ￦ 589,959 ￦ 325,200 ￦ 13,266 ￦ 1,388,320





Reserve for reinsurance Premiums (487,311) (1,494) (8,492) (170) (497,467)

￦449,772 ￦2,052,634 ￦8,951,543 ￦2,785,878 ￦14,239,827


Outstanding claims $ 333,959 $ 428,407 $ 236,149 $ 9,633 $ 1,008,148





Reserve for reinsurance Premiums (353,868) (1,085) (6,166) (123) (361,242)

$ 326,608 $ 1,490,548 $ 6,500,286 $ 2,023,003 $ 10,340,445

Financial Section

20092009 20082008

16. CATASTROPHE RESERVES:

Catastrophe reserves as of March 31, 2009 and 2008 are summarized as follows:

17. ASSETS AND LIABILITES DENOMINATED IN FOREIGN CURRENCY:

Assets and liabilities denominated in foreign currency as of March 31, 2009 and 2008 are summarized as follows (Unit: Won in

millions, dollars in thousands):


Beginning balance ￦986,676 ￦935,337 $ 716,488 $ 679,208

Net increase:

Fire insurance - (290) - (211)

Marine insurance 1,468 201 1,066 146

Automobile insurance 54,012 36,462 39,222 26,477

Special insurance 16,243 14,166 11,795 10,287

Overseas insurance 886 800 643 581

Sub total 72,609 51,339 52,726 37,280

Ending balance ￦1,059,285 ￦986,676 $ 769,214 $ 716,488


2009 2008

Assets:

Due from banks $ 146,081 ￦201,168 $ 7,491 ￦7,429

Overseas securities 39,672 54,632 58,028 57,547

Insurance receivables 2 24,890 34,276 16,436 16,299

Liabilities:

Insurance payables $ 38,533 ￦53,064 $ 23,920 ￦23,723

LoansU.S. DollarsU.S. Dollars Korean Wonequivalent (*)

Korean Wonequivalent (*)

(*) The Korean Won equivalent of assets and liabilities denominated in foreign currency are translated in these financial statements based on the basic rate (￦1,377.10

and ￦991.70 to US$1.00 at March 31, 2009 and 2008, respectively) or cross rates for other currencies announced by Seoul Money Brokerage Services Ltd. at the

balance sheet dates.

18. BORROWINGS:

Borrowings as of March 31, 2009 consist of the following:

Type Bank Annual interest rate Korean Won (In millions)

Call money Korea Investment Trust Management 2.08% ￦300

Bond sold under

repurchase

agreement KSFC 2.02% 25,200

￦25,500

Translation into U.S. Dollars (Note 2) $ 18,517


Primary premiumAssumed

reinsurancepremium

Refund ofsurrender

value

Assumedreinsurance’s

refund ofsurrender value

Premiumincome


(2) Premium income for the year ended March 31, 2008 is as follows:

19. PREMIUM INCOME:

(1) Premium income for the year ended March 31, 2009 is as follows:

Fire insurance ￦48,326 ￦ - ￦ (327) ￦ - ￦47,999

Marine insurance 281,951 1,021 (2,184) - 280,788

Automobile insurance 3,060,513 - (142,522) - 2,917,991

Special insurance 760,079 3,496 (2,430) - 761,145

Guarantee insurance - 7 - - 7

Overseas insurance 17,273 108,632 - (1,552) 124,353

Long term insurance 5,013,973 - - - 5,013,973

Pension insurance 562,784 - - - 562,784

Incidental business - 28,069 - - 28,069

￦9,744,899 ￦141,225 ￦ (147,463) ￦ (1,552) ￦9,737,109

Translation into

U.S. Dollars (In thousands) (Note 2) $ 7,076,392 $ 102,552 $ (107,082) $ (1,127) $ 7,070,735

Primary premiumAssumed

reinsurancepremium

Refund ofsurrender

value

Assumedreinsurance’s

refund ofsurrender value

Premiumincome


Fire insurance ￦52,008 ￦ - ￦ (482) ￦ - ￦51,526

Marine insurance 179,038 176 (1,749) - 177,465

Automobile insurance 3,112,307 - (138,059) - 2,974,248

Special insurance 710,882 2,163 (10,034) - 703,011

Guarantee insurance - 2 - - 2

Overseas insurance 16,772 60,458 - (37) 77,193

Long term insurance 4,651,234 - - - 4,651,234

Pension insurance 438,364 - - - 438,364

Incidental business - 24,227 - - 24,227

￦9,160,605 ￦87,026 ￦ (150,324) ￦ (37) ￦9,097,270

Translation into

U.S. Dollars (In thousands) (Note 2) $ 6,652,099 $ 63,195 $ (109,160) $ (27) $ 6,606,107


Financial Section

20092009 20082008

20092009 20082008

20092009 20082008

20092009 20082008

20. REINSURANCE:

(1) Reinsurance income for the years ended March 31, 2009 and 2008 is as follows:

(2) Reinsurance premium expenses for the years ended March 31, 2009 and 2008 are as follows:


Reinsurance claims ￦375,927 ￦332,214 $ 272,984 $ 241,242

Reinsurance refund paid (18,342) (11,010) (13,319) (7,995)

Reinsurance income ￦357,585 ￦321,204 $ 259,665 $ 233,247



Reinsurance claims ￦780,192 ￦678,910 $ 566,547 $ 492,999

Reinsurance refund paid (4,492) (4,651) (3,262) (3,377)

Reinsurance income ￦775,700 ￦674,259 $ 563,285 $ 489,622


21. DEFERRED ACQUISITION COSTS:

Changes in deferred acquisition costs for the years ended March 31, 2009 and 2008 are as follows:Korea Won / In millions

Beginning balance ￦1,132,476 ￦955,451 $ 822,363 $ 693,814

Increase 743,509 612,630 539,909 444,870

Amortization (571,049) (435,605) (414,675) (316,321)

Ending balance ￦1,304,936 ￦1,132,476 $ 947,597 $ 822,363


22. ACCRUED SEVERANCE INDEMNITIES:

Changes in accrued severance indemnities for the years ended March 31, 2009 and 2008 are as follows:Korea Won / In millions

Beginning balance ￦149,012 ￦120,678 $ 108,207 $ 87,632

Provision for the year 36,246 31,679 26,321 23,004

Succession from others 4,068 - 2,954 -

Payment during the year (14,428) (3,345) (10,477) (2,429)

Ending balance 174,898 149,012 127,005 108,207

National Pension payments (1,238) (1,269) (899) ( 922)

Retirement pension plan assets (121,339) (95,605) (88,113) (69,424)

￦52,321 ￦52,138 $ 37,993 $ 37,861



20092009 20082008

20092009 20082008

20092009 20082008


The Company records as pension plan assets in balance sheets amounting to ￦121,339 million ($88,113 thousand) that was

placed to reserve in Samsung Life Insurance Co., Ltd. From October 4, 2006, paid-in retirement pension plan assets were replaced

with ”fixed interest rate (6.5%)” from “floating interest rate (minimum guaranteed rate 2.0%)”. In addition, provision for the year

amounted to ￦35,854 million ($26,036 thousand), net of defined contribution retirement pension plan amounting to ￦289 million

($210 thousand) and ￦392 million ($285 thousand) in selling and general operating expenses and investment administrative

expenses, respectively.

Retirement pension plan assets as of March 31, 2009 and 2008 are as follows:

23. INCOME TAX:

(1) The components of income tax expense for the years ended March 31, 2009 and 2008 are summarized follows:

(*) Tax effect on changes in cumulative temporary differences


Income tax to be paid ￦237,544 ￦179,936 $ 172,496 $ 130,663

Tax effect on changes in cumulative temporary differences(*) (15,023) 4,094 (10,909) 2,973

Income tax due to gains on sale of treasury stock (424) (155) (308) (113)

Income tax ￦222,097 ￦183,875 $161,279 $ 133,523



Beginning balance ￦ (40,103) ￦ (36,085) $ (29,121) $ (26,203)

Changes due to tax reconciliation 1 76 1 55

Ending balance (25,079) (40,103) (18,211) (29,121)

Tax effect on changes in cumulative temporary differences ￦ (15,023) ￦4,094 $(10,909) $ 2,973



Cash and bank deposits ￦91,975 ￦79,610 $ 66,789 $ 57,810

Investment securities 23,661 15,995 17,182 11,614

Loans 2,305 - 1,674 -

Other assets 3,398 - 2,468 -

￦121,339 ￦95,605 $ 88,113 $ 69,424


Description

Financial Section

20092009 20082008

(2) An explanation of the relationship between income tax expense and accounting income before income tax expense for the years

ended December 31, 2009 and 2008 is as follows:


Income before income tax ￦820,805 ￦660,365 $ 596,039 $ 479,533

Tax effect at the rate of 27.5% 225,690 181,587 163,888 131,861

Adjustment:

Non-taxable income (1,510) (464) (1,097) (337)

Non-deductible expenses 1,932 4,642 1,403 3,371

Tax credit (160) (901) (116) (654)

Other (3,855) (989) (2,799) (718)

Income tax expense ￦222,097 ￦183,875 $161,279 $133,523

Effective tax rate (income tax expense/pretax income) 27.06% 27.84% 27.06% 27.84%


(3) Income tax and deferred income tax assets (liabilities) directly adjusted to capital as of March 31, 2009 are summarized as

follows:

(4) Changes in significant cumulative temporary differences and deferred income tax assets (liabilities) are as follows:


Income tax due to gains on sale of treasury stock ￦1,542 ￦ (424) ￦ 1,118

Gain on valuation of available-for-sale securities 1,405,742 (309,735) 1,096,007


application of the equity method 24,995 (5,499) 19,496


application of the equity method (4,028) 886 (3,142)

Gain on valuation of derivatives (247,181) 54,369 (192,812)


income arising from separate account 1,734 - 1,734

￦1,182,804 ￦ (260,403) ￦922,401

Translation into

U.S. Dollars (In thousands) (Note 2) $ 858,909 $ (189,095) $ 669,814

After adjustmentDeferred income tax

assets (liabilities)Before adjustment

Cumulative temporary differences

Temporary difference, net ￦ (181,676) ￦34,842 ￦ (146,834) ￦ (40,103) ￦15,024 ￦ (25,079)

Capital adjustment (1,319,051) 137,789 (1,181,262) (362,853) 102,874 (259,979)

￦ (1,500,727) ￦172,631 ￦ (1,328,096) ￦ (402,956) ￦117,898 ￦ (285,058)

Translation into

U.S. Dollars (In thousands) (Note 2) $(1,089,773) $ 125,358 $ (964,415) $ (292,612) $ 85,613 $ (206,999)

Deferred income tax assets (liabilities)

2008 2009Increase(decrease)

2008 2009Increase(decrease)

Description

Description

Description


20092009 20082008

20092009 20082008


(5) Prepaid income tax (payables) before offset as of December 31, 2009 and 2008 are as follows:


Prepaid tax before offset ￦61,390 ￦99,084 $ 44,579 $ 71,951

Income tax payable before offset 237,153 180,956 172,212 131,404

Income tax payable ￦175,763 ￦81,872 $ 127,633 $ 59,453


24. SHAREHOLDERS’ EQUITY:

(1) Capital stock as of March 31, 2009 is as follows (Unit: Won):

Preferred shareholders have no voting rights but may receive accumulative dividends and liquidation proceeds. Preferred

shareholders normally receive additional cash dividends of 1% on par value. Upon liquidation, preferred shareholders are entitled to

receive liquidation proceeds prior to the common shareholders. The Company allows the retirement of the stocks within the amount

of dividend based on the decision of the board of directors in accordance with related law. Accordingly, the Company retired the

treasury stock of the 730,000 shares of common stock and 50,000 shares of preferred stock on November 11, 2003 based on

the decision of the board of directors on September 5, 2003. Also, the Company retired treasury stock, which acquisition cost

amounts to ￦262,821 million ($190,851 thousand), of the 1,500,000 shares of common stock and 100,000 shares of preferred

stock on May 28, 2007 based on the decision of the board of directors on April 18, 2007. As a result, the difference occurs

between the amount of the value per share multiplied by the number of issued stocks and the capital stock as of March 31, 2009.

(2) Capital surplus

Capital surplus as of March 31, 2009 and 2008 is summarized as follows:

Description

Number of the authorized shares

Value per share

Number of the issued stock

-Common shares

-Preferred shares

100,000,000

￦500

47,374,837

3,192,000


Additional paid-in capital ￦593,429 ￦593,429 $ 430,927 $ 430,927

Asset revaluation surplus 132,209 132,209 96,005 96,005

Other capital surplus 9,229 8,111 6,702 5,890

￦734,867 ￦733,749 $ 533,634 $ 532,822


Financial Section

(3) Revaluation surplus

The Company revalued its property on January 1, 1999 in accordance with the Assets Revaluation Law. Details of the asset

revaluation and revaluation surplus are summarized as follows (Unit: Won in millions, dollars in thousands):

Net book value Revalued amount Revaluation surplus

Land ￦172,180 $ 125,031 ￦262,061 $ 190,299 ￦89,881 $ 65,269

Buildings 289,443 210,183 333,410 242,110 43,967 31,927

Structures 345 250 545 396 200 145

￦461,968 $ 335,464 ￦596,016 $ 432,805 ￦134,048 $ 97,341

Korean Won U.S. dollars Korean Won U.S. dollars Korean Won U.S. dollars

The movements in the revaluation surplus for the period from January 1, 1999 to March 31, 2009 are summarized as follows:

(4) Legal reserve

Legal reserve as of March 31, 2009 is ￦13,237 million ($9,612 thousand). The Korean Commercial Code requires the Company

to appropriate as legal reserve an amount equal to at least 10% of the cash dividends for each accounting period until the reserve

equals 50% of stated capital. The legal reserve may be used to reduce a deficit or it may be transferred to stated capital by a

shareholders’ resolution.

(5) Voluntary reserve

Voluntary reserve as of March 31, 2009 amounts to ￦1,643,159 million ($1,193,202 thousand), as approved at the general

meeting of shareholders and ￦1,852 million ($1,345 thousand) reclassified from reserve for business rationalization as required

previously in the Korean Corporate Tax Law.

25. TREASURY STOCK:

Treasury stock as of March 31, 2009 and 2008 is summarized as follows:

As of March 31, 2009 and 2008, acquisition cost of treasury stock is ￦97,178 million ($70,566 thousand) and ￦98,539 million

($71,555 thousand), respectively. The Company holds its treasury stock for price stabilization and for exercise of stock options.

Gains on reissue of treasury stock are recorded as other capital surplus. As of March 31, 2009, gains on reissue of treasury stock

amount to ￦9,229 million ($6,702 thousand).


Asset revaluation surplus carried forward

before January 1, 1999 ￦1,506 $ 1,094

Asset revaluation surplus on January 1, 1999 134,048 97,340

Revaluation taxes (3,345) (2,429)

Revaluation surplus as of March 31, 2005 ￦132,209 $ 96,005



April 1, 2008 3,828,032 300,780 ￦ 98,539 $ 71,555

Exercise of stock option

(54,956) - (1,361) (989)

March 31, 2009 3,773,076 300,780 ￦ 97,178 $ 70,566


Amount Amount

Number of shares

Common stock Preferred stock


20092009 20082008


26. COMPREHENSIVE INCOME STATEMENTS:

The comprehensive income statements for the years ended March 31, 2009 and 2008 are summarized as follows:

27. STOCK OPTIONS:

The Company granted stock options to certain employees according to a resolution at the shareholders’ meeting and the board of

directors’ meeting. Details of the stock options are summarized as follows (Unit: Won):


Net income ￦598,708 ￦476,490 $ 434,760 $ 346,010

Other comprehensive income (loss):

Gain on valuation of available-for-sale securities 103,614 100,413 75,241 72,916

Changes in equity arising from application of the equity method 19,009 461 13,804 334

Negative changes in equity arising from application of

the equity method (472) 7,015 (343) 5,095

Gain (loss) on overseas operation translation (*) 21,489 2,848 15,605 2,068

Loss on valuation of cash flow hedge derivatives (158,718) (40,108) (115,256) (29,125)

Accumulated other comprehensive income arising from

separate account 1,650 84 1,198 61

Comprehensive income ￦585,280 ￦547,203 $ 425,009 $ 397,359


Number of shares granted 50,953 81,950 7,500 19,304 31,723

Stock Common stock Common stock Common stock Common stock Common stock

Exercise price ￦23,800 ￦38,900 ￦82,500 ￦62,600 ￦74,900

Exercisable period May 31, 2003 Sep 7, 2003 May 31, 2004 Jun 12, 2005 May 29, 2006

~May 30, 2010 ~Sep 6, 2011 ~May 30, 2012 ~Jun 11, 2013 ~May 28, 2014

Service period 3 years 2 years 2 years 2 years 2 years

(*) For presentation in the accompanying financial statements, assets and liabilities in financial statements of the overseas branch are translated into Korean won at the

current exchange rate, shareholders’ equity at historical exchange rate and income and expense at the weighted average exchange rate for the year. Translation gains of

￦15,886 million ($11,536 thousand) resulting from the translation of financial statements of the overseas branch are recorded in loss on overseas operation translation as

accumulated other comprehensive loss.

May 30, 2000 Sep 6, 2001 May 30, 2002 Jun 11, 2003 May 28, 2004

The Company estimated compensation cost associated with the stock options using Black-Sholes Model. Details of assumptions

used are summarized as follows:

Risk free rate 9.22% 5.39% 6.57% 4.14% 4.54%

Expected excisable period 5 years 5 years 5 years 5 years 5 years

Expected volatility of stock price 65.47% 66.24% 66.30% 59.78% 52.68%

Expected dividend rate 1.05% 1.30% 1.22% 1.57% 1.35%

Expected rate of rights expiration 0.00% 0.00% 0.00% 0.00% 0.00%


Financial Section

20092009 20082008

Details on the compensation cost for stock options are summarized as follows:

28. DIVIDENDS:

The Company has proposed to appropriate retained earnings for cash dividends as follows:

Valuation amount for stock options ￦4,536 ￦6,818 ￦741 ￦1,286 ￦1,342

Accumulated decrease of stock

options for exercise, cancellation ,

change and others 3,814 5,088 394 681 277

Compensation costs for the year

ended Mar 31, 2007 - - - - -

Residual of stock options 722 1,730 347 605 1,065

Additional compensation costs to be incurred - - - - -

Translation into U.S. Dollars (In thousands) (Note 2) $- $ - $ - $ - $-



Common stock ￦130,805 ￦130,640 $ 94,986 $ 94,866

Preferred stock 8,688 8,688 6,309 6,309

￦139,493 ￦139,328 $ 101,295 $ 101,175

Net earnings ￦598,708 ￦476,490 $ 434,760 $ 346,010

Dividends as a percentage of net earnings 23.30% 29.24% 23.30% 29.24%


29. TRANSACTIONS AND BALANCES WITH RELATED PARTIES:

(1) The Company is the ultimate holding company and its subsidiaries as of March 31, 2009 are as follows (Unit: Won in millions,

dollars in thousands):

P.T Asuransi Samsung Tugu 10,500 70.0 ￦5,373 ($3,902) Insurance Indonesia


Insurance of China Limited (*)

Samsung Vina Insurance (*) - 100.0 35,497 ($25,777) Insurance China

Samsung Vina Insurance (*)

Samsung Fire & Marine Insurance of

China Limited (*) - 50.0 14,734 ($10,699) Insurance Vietnam

(*) Shares are not presented since it is stock without par value.

SharesOwnership

ratio (%)Shareholder’s

equityBusiness LocationSubsidiaries


20092009 20082008

20092009 20082008

20092009 20082008


Other related parties are Samsung Fire & Marine Insurance Claim Adjustment Service and others.

(2) Major balances and significant transactions with affiliates as of and for the years ended March 31, 2009 and 2008 are as

follows:

(3) Major balances and significant transactions with the company accounted for using the equity method as of and for the years

ended March 31, 2009 and 2008 are as follows:


Revenues and expenses:

Premiums income ￦6,590 ￦5,006 $ 4,785 $ 3,635

Claims paid 2,520 1,847 1,830 1,341

Receivables and payables:

Insurance receivables 1,751 356 1,272 259

Insurance payables 189 175 137 127



Revenues and expenses:

Investigation expense for claim paid ￦107,961 ￦98,487 $ 78,397 $ 71,518

Receivables and payables:

Loans 34,951 36,617 25,380 26,590


(4) The compensations for the key management of the Company for the year ended March 31, 2009 are as follows


Short-term salaries ￦2,776 $ 2,016

Long-term salaries 1,159 842

Provision for severance indemnities 700 508


Description AmountAmount

30. EARNINGS PER COMMON SHARE:

(1) Earnings per common share for the years ended March 31, 2009 and 2008 is calculated as follows:


Net income ￦598,708 ￦476,490 $ 434,760 $ 346,010

Dividends on preferred stock (8,688) (8,688) (6,309) (6,309)

Earnings available for common stock 590,020 467,802 428,451 339,701

Weighted-average number of shares of common stock 43,568,042 44,953,649 43,568,042 44,953,649

Earnings per common share (Won, U.S. dollars) ￦13,542 ￦10,406 $ 9.83 $ 7.56


Financial Section

20092009 20082008

31. COMMITMENTS AND CONTINGENCIES:

(1) Promissory Note

As of March 31, 2009, the Company has provided Samsung Life Insurance Company and others with 3 promissory notes with total

face value amounting to ￦647 million ($470 thousand), as collateral for rental deposits.

(2) Reinsurance Contract

Non-life insurance companies (including the Company) assume and cede certain portions of the total insurance premium with

Korean Reinsurance Company and the remaining portion is covered by foreign reinsures. The Company utilizes reinsurance

arrangements to limit its maximum loss, to provide greater diversification of risks and to minimize exposure to large risks.

(3) Bank Overdraft Agreement

As of March 31, 2009, the Company has bank overdraft agreements with Standard Chartered First Bank Korea and other

banks up to ￦460,000 million($ 334,035 thousand), including agreements for separate account up to ￦ 70,000 million ($

50,831 thousand).

(4) Guarantee Insurance

As of March 31, 2009, the Company entered into guarantee agreements with Seoul Guarantee Insurance Co., Ltd. for guarantee

limits of ￦18,891 million ($13,718 thousand).

(5) Lawsuits

The Company is a defendant in 2,173 lawsuits for insurance claims aggregating ￦179,192 million ($130,123 thousand). The

Company has set up a policy reserve for estimated losses amounting to ￦132,613 million ($96,299 thousand) in relation to the

above lawsuits as policy reserves.

2) Diluted net income per common share for the years ended March 31, 2009 and 2008 is calculated as follows:

Diluted net income per common share are computed by dividing the diluted net income for the years ended March 31, 2009 and

2008 by the weighted-average number of diluted shares plus common shares, assuming all stock options are exercised at the

beginning.


Earnings available for common stock ￦590,020 ￦467,802 $ 428,451 $ 339,701

Compensation cost, net of tax - (132) - (96)

Diluted net income 590,020 467,670 428,451 339,605

Weighted-average number of diluted share 43,742,783 45,152,411 43,742,783 45,152,411

Diluted net income per common share (Won, U.S. dollars) ￦13,488 ￦10,358 $ 9.79 $ 7.52




(6) Derivatives Instruments

As of March 31, 2009, the Company entered into contracts of financial derivative instruments as follows (Unit: Won in millions,

dollars in thousands):

In connection with the financial derivative instruments, the Company recognized gain and loss on valuation amounting to ￦2,559

million ($1,858 thousand) and ￦14,696 million ($10,672 thousand), respectively, for the year ended March 31, 2009. In addition,

loss on valuation of the financial derivative instruments amounting to ￦247,181 million ($179,494 thousand), the amount before

income tax directly deducted from accumulated other comprehensive loss, is accounted for and reflected as accumulated other

comprehensive loss as of March 31, 2009.

(7) Credit Linked Notes and Collateralized Debt Obligations

Credit linked notes and collateralized debt obligations as of March 31, 2009 are as follows (Unit: Won in millions, dollars in

thousands):

The Company has credit-linked notes amounting to ￦165,252 million ($120,000,000) at face value. The Company takes the risk

to undertake goods or pay cash equivalent to Reference Obligation on demand of a person related to the transaction in case credit

event on Reference Obligation occurs.

Abn Amro Ftd CLN 6.12 $ 20,000 ￦20,974 2006-10-26 2016-12-20

JPMorgan Corsair CLN LIB03USD+0.88 20,000 19,439 2007-07-19 2014-06-09

Leveraged ROK CLN LIB03USD+0.67 20,000 21,032 2007-01-24 2017-03-20

Leveraged ROK CLN070913 LIB03USD+1.10 20,000 21,467 2007-09-13 2017-09-20

Merit Holdings Ltd SCB CLN LIB03USD+0.88 10,000 9,220 2007-07-30 2014-09-20

SCB Ftd CLN 5.55 20,000 24,056 2006-10-10 2011-12-20

Palladium CDO Series2 (Class A-1U) LIB06USD+0.50 10,000 1,807 2006-08-21 2013-12-20

$ 120,000 ￦117,995

Interest rate(%) Nominal price Book value Acquisition date Maturity date

Total

Foreign currency Forward ￦182,377 $ 132,435 ￦- $ - ￦182,377 $ 132,436

Foreign currency swap 719,097 522,182 9,590 6,964 709,507 515,218

Interest rate forward 4,131 3,000 4,131 3,000 - -

￦905,605 $ 657,617 ￦13,721 $ 9,964 ￦891,884 $ 647,654

TotalTotal

Korean WonTranslation Into

U.S. Dollars (Note 2) Korean WonTranslation Into

U.S. Dollars (Note 2) Korean WonTranslation Into

U.S. Dollars (Note 2)

Description

Financial Section

20092009 20082008

20092009 20082008

32. SEPARATE ACCOUNT:

The Company has recorded corporate retirement insurance and corporate pension insurance as a separate account independently

from ordinary accounts in accordance with Insurance Supervisory Regulation as established by the Financial Supervisory Commission

of the Republic of Korea. Separate account is stated at fair value and the Company properly presents the financial status and

operating results of the separate account.

The financial statements of the separate account of corporate retirement insurance as of and for the years ended March 31, 2009

and 2008 are as follows:


Separate account assets:

Cash and deposits ￦364,618 ￦358,232 $ 264,773 $ 260,135

Securities 328,826 443,161 238,781 321,807

Loans 25,390 19,684 18,437 14,294

Others 9,352 13,324 6,791 9,675

Due from ordinary account 13,490 11,147 9,796 8,095

￦741,676 ￦845,548 $ 538,578 $ 614,006

Separate account liabilities:

Policy reserves ￦712,602 ￦813,616 $ 517,466 $ 590,818

Others 12,104 12,541 8,789 9,107

Due to ordinary account 16,970 19,391 12,323 14,081

￦741,676 ￦845,548 $ 538,578 $ 614,006


Balance sheets



Premiums earned ￦179,630 ￦281,796 $ 130,441 $ 204,631

Interest income 43,668 40,016 31,710 29,058

Others 8,672 4,018 6,297 2,917

￦231,970 ￦325,830 $ 168,448 $ 236,606

Separate account expenses:

Provision for policy reserves ￦ (101,014) ￦53,626 $ (73,353) $ 38,941

Claims paid 322,136 260,919 233,924 189,470

Others 10,848 11,285 7,877 8,195

￦231,970 ￦325,830 $ 168,448 $ 236,606


Statements of income


20092009 20082008

20092009 20082008

The financial statements of the separate account of corporate pension insurance as of and for the years ended March 31, 2009

and 2008 are as follows:



Cash and deposits ￦168,040 ￦94,231 $ 122,025 $ 68,427

Securities 135,241 57,240 98,207 41,566

Loans 9,950 1,000 7,225 726

Others 5,941 3,525 4,314 2,560

Due from ordinary account 36,648 22,469 26,612 16,316

￦355,820 ￦178,465 $ 258,383 $ 129,595

Separate account liabilities:

Policy reserves ￦317,281 ￦171,643 $ 230,398 $ 124,641

Securities 22,399 6,341 16,265 4,605

Accumulated other comprehensive income (loss) 1,734 84 1,259 61

Due to ordinary account 14,406 397 10,461 288

￦355,820 ￦178,465 $ 258,383 $ 129,595


Balance sheets


Separate account income:

Premiums earned ￦198,376 ￦177,858 $ 144,053 $ 129,154

SInterest income 14,921 6,509 10,835 4,727

Others 1,449 1,182 1,052 858

￦214,746 ￦185,549 $ 155,940 $ 134,739

Separate account expenses:

Provision for policy reserves ￦145,638 ￦67,581 $ 105,757 $ 49,075

Claims paid 6 65,074 115,574 47,254 83,926

Others 4,034 2,394 2,929 1,738

￦214,746 ￦185,549 $ 155,940 $ 134,739


Statements of income

Financial Section

20092009 20082008

20092009 20082008

33. SELLING AND GENERAL OPERATING EXPENSES:

Selling and general operating expenses for the years ended March 31, 2009 and 2008 are as follows:

34. OTHER ASSETS AND OTHER LIABILITIES:

(1) Other assets as of March 31, 2009 and 2008 are summarized as follows:


Salaries ￦383,521 ￦343,953 $ 278,499 $ 249,766


Other employee benefits 58,007 57,277 42,123 41,592

Taxes and due 60,355 55,636 43,828 40,401

Rent 61,077 58,416 44,352 42,420

Depreciation 47,860 51,665 34,754 37,517

Amortization 32,916 30,794 23,902 22,362

Commissions 81,303 79,883 59,039 58,008

Advertising 48,458 41,580 35,188 30,194

Computer related expenses 54,032 53,526 39,236 38,869

Deferred acquisition cost & collection cost 224,119 211,290 162,747 153,431

Agency fee 296,636 287,483 215,407 208,760

Investigation expense for claim paid 164,175 145,730 119,218 105,823

Others 142,347 126,433 103,367 91,811

￦1,690,949 ￦1,574,349 $ 1,227,906 $ 1,143,235



Development costs and other intangible assets ￦82,484 ￦78,440 $ 59,897 $ 56,960

Other account receivables 121,115 122,174 87,947 88,719

Prepaid expenses 10,587 10,044 7,688 7,294

Advanced payments 4,881 12,158 3,544 8,829

Note receivables 2,496 907 1,813 659

Prepaid value added tax 778 679 565 493

Securities deposit 3,131 2,891 2,274 2,099

Financial derivative assets 22,020 9,939 15,990 7,217

Others 1,242 944 903 684

Allowance for doubtful accounts (2,759) (4,061) (2,003) (2,949)

￦245,975 ￦234,115 $ 178,618 $ 170,005



20092009 20082008


(2) Other liabilities as of March 31, 2009 and 2008 are summarized as follows:

35. EMPLOYEES’ WELFARE AND DONATIONS:

(1) Supporting educational expenses

In order to mitigate the burden of the educational expenses of employees’ children, the Company supports portion of tuition of pre-

school, and entrance fee and tuition of middle school to college.

(2) Medical examination

The Company provides regular annual medical examination service for its employees.

(3) Others

The Company executes paid vacation, such as congratulations and condolences vacation, long service vacations and vacation for

training.

(4) Donation to the public

The Company donated to college development funds and others amounting to ￦15,147 million ($10,999 thousand) and ￦20,553

million ($14,925 thousand) for the years ended March 31, 2009 and 2008, respectively.


Other account payables ￦19,075 ￦22,722 $ 13,852 $ 16,500

Accrued severance indemnities 52,321 52,138 37,993 37,861

Premiums received in suspense 412 215 299 156

Note payables 610 1,348 443 978

Advanced receipts 23,326 14,555 16,939 10,569

Withholdings 7,683 5,652 5,579 4,104

Unearned income 592 468 430 340

Accrued value added tax 1,113 1,041 809 756

Financial derivatives liabilities 280,590 61,109 203,754 44,375

Other 28,957 36,555 21,027 26,545

￦414,679 ￦195,803 ￦301,125 $ 142,184


Financial Section

20092009 20082008

20092009 20082008

36. VALUE-ADDED:

Information needed for calculation of value-added for the years ended March 31, 2009 and 2008 is as follows:

37. CASH FLOW STATEMENTS:

Significant transactions with no effects to the cash flows for the years ended March 31, 2009 and 2008 are as follows:

38. PREMIUM DEFICIENCY:

(1) The objects of insurance contracts for calculating premium deficiency

Based on valid insurance contracts as of February 28, 2009, the Company included the individual pension insurance products and

long-term insurance against loss products with fixed interest rate and floating interest rate in calculating premium deficiency. In

addition, general insurance against loss and retirement insurance with less than one year insurance term were excluded.

(2) The basis of calculating premium deficiency is as follows① Discount rate: The discount rate is 5.32% (Rate of return on assets management for recent 3years from April 1, 2006 to March 31,

2009).

② Rate of operating expenses: The rate of operating expenses is 90.5% (Ratio of actual operating expenses to anticipated operating

expenses for recent 1 year from March 1, 2008 to February 28, 2009).

③ Rate of claim payment -The rate of claim payment is 72.0% (Ratio of claim payment to the anticipated risk of the insurer for recent 3

years from Jan 1, 2006 to December 31, 2008).


Transfer from construction inprogress to buildings ￦86,709 ￦ 23,547 $ 62,965 $ 17,099

Transfer from construction inprogress to land 62,100 - 45,095 -

Transfer from prepaid accounts to intangible assets 26,582 20,599 19,303 14,958

Transfer from equity securities to other securities - 3,000 - 2,178

Transfer from available-for-sale securities to securities

accounted for using the equity method 3,570 - 2,592 -

Transfer from furniture and other equipment to vehicles - 11 - 8

Retirement of treasury stock - 262,821 - 190,851



Salaries ￦395,447 ￦355,341 $ 287,159 $ 258,036


Employee benefits 59,344 58,728 43,093 42,646

Taxes and dues 99,252 89,045 72,073 64,661

Rental expenses 61,084 58,426 44,357 42,427

Depreciation 56,060 59,882 40,709 43,484

Total ￦707,722 ￦653,169 $ 513,922 $ 474,308




(3) The calculation and accounting principle of reserve for claims by type of insurance contract, anticipated interest rate and

premium surplus (premium deficiency) as of March 31, 2009 are summarized as follows:

39. MAJOR INDICATORS FOR THE FINAL INTERIM PERIOD:

The major indicators of management performance for the final interim period (unaudited) are as follows (Unit: Won in millions, dollars

in thousands, except net income per share):


Operating revenues ￦ 2,956,683 ￦2,705,609 $ 2,147,036 $ 1,964,715

Operating expenses 2,748,551 2,512,505 1,995,898 1,824,490

Operating income 208,132 193,104 151,138 140,225

Other income 12,447 9,614 9,039 6,981

Other expenses 5,291 1,957 3,842 1,421

Net income 164,664 146,044 119,573 106,052

Net income per common share 3,728 3,229 2,707 2,345


2009, 4Q2009, 4Q 2008, 4Q2008, 4Q

Long-term with dividend ￦387 2.50~6.50% ￦15

Long-term without dividend 82,399 3.25~8.00% 16,117

Individual pension 28,421 2.50~7.50% 3,556

New public announcement1 992 4.0~4.25% 33

New public announcement2 1,147 3.0% 260

Total 113,346 19,981

(Fixed interest rate) 40,312 2,519

(Floating interest rate) ￦73,034 ￦17,462

Translation into



Anticipated interest rate(*)Reserve for claims Premium surplus(deficiency)Description

Description

(*) The anticipated interest rate is based on a guaranteed portion.

④ Rate of changing on condition-The rate of changing on condition is as follows (Ratio of changing on condition to the number of contracts

for recent 3 years from Jan 1, 2006 to December 31, 2008):

Rate of changing on condition was reflected by 7 types of ratio and the rate of maintenance caused by reflection is as follows:

Long-term with dividend 89.80% 76.20% 63.70% 53.30% 59.60%

Long-term without dividend 77.70% 61.50% 54.80% 48.10% 46.20%

Individual pension 85.40% 75.00% 68.60% 62.70% 56.40%

Total 78.20% 62.10% 55.30% 48.50% 46.50%

13th 25th 37th 49th 61thDescription

Financial Section

Internal Accounting Control System (“IACS”) Review ReportENGLISH TRANSLATION OF A REPORT ORIGINALLY ISSUED IN KOREAN

To the Representative Director ofSamsung Fire & Marine Insurance Co., Ltd.:

We have reviewed the accompanying Report on the Management’s Assessment of IACS (the “Management’s Report”) of Samsung Fire &

Marine Insurance Co., Ltd. Company (the “Company”) as of March 31, 2009. The Management’s Report, and the design and operation of

IACS are the responsibility of the Company’s management.

Our responsibility is to review the Management’s Report and issue a review report based on our procedures. The Company’s management

stated in the accompanying Management’s Report that “based on the assessment of the IACS as of March 31, 2009, the Company’s IACS

has been appropriately designed and is operating effectively as of March 31, 2009, in all material respects, in accordance with the IACS

Framework established by the Korea Listed Companies Association.”

We conducted our review in accordance with the IACS Review Standards established by the Korean Institute of Certified Public

Accountants. Those standards require that we plan and perform a review, objective of which is to obtain a lower level of assurance than an

audit, of the Management’s Report in all material respects. A review includes obtaining an understanding of a company’s IACS and making

inquiries regarding the Management’s Report and, when deemed necessary, performing a limited inspection of underlying documents and

other limited procedures.

The Company’s IACS represents internal accounting policies and a system to manage and operate such policies to provide reasonable

assurance regarding the reliability of financial statements prepared, in accordance with accounting principles generally accepted in the

Republic of Korea, for the purpose of preparing and disclosing reliable accounting information. Because of its inherent limitations, IACS may

not prevent or detect a material misstatement of the financial statements. Also, projections of any evaluation of effectiveness of IACS to future

periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

Based on our review, nothing has come to our attention that causes us to believe that the Management’s Report referred to above is not

fairly stated, in all material respects, in accordance with the IACS Framework established by the Korea Listed Companies Association.

Our review is based on the Company’s IACS as of March 31, 2009, and we did not review its IACS subsequent to March 31, 2009. This

report has been prepared pursuant to the Acts on External Audit for Stock Companies in the Republic of Korea and may not be appropriate

for other purposes or for other users.

May 8, 2009

Notice to ReadersThis report is annexed in relation to the audit of the financial statements as of March 31, 2009 and the review of internal accounting control system pursuant to Article

2-3 of the Act on External Audit for Stock Companies of the Republic of Korea.

Deloitte Anjin LLC14Fl., Hanwha Securities Bldg., 23-5 Yoido-dong,

Youngdeungpo-gu, Seoul 150-717, Korea

Tel:+82.2.6676 1000, 1114 Fax:+82.2.6674 2114www.deloitteanjin.co.kr


Financial Section

WORLDWIDE NETWORK

OVERSEAS NETWORK

SUBSIDIARY & JOINT VENTURE

■IndonesiaP.T. ASURANSI SAMSUNG TUGUPlaza Dm Bldg. 23rd Floor, Suite # 2301Jl. Jend. Sudirman Kav.25 Jakarta Selatan Indonesia - 12920Telephone : 62-21-520-5511 Facsimile : 62-21-520-5522

■VietnamSAMSUNG VINA INSURANCE CO., LTD.9th Floor, Diamond Plaza Bldg., 34 Le Duan St., Dist 1, Ho Chi Minh, VietnamTelephone : 84-8-823-7812~3 Facsimile : 84-8-823-7811

SAMSUNG VINA INSURANCE CO., LTD. HANOI BRANCH8th Floor, VinaRe Building, No.141, Le Duau St. Hoan Kiem District, Hanoi,VietnamTelephone : 84-4-942-5251, 5253-4 Facsimile : 84-4-942-5250

■ChinaSAMSUNG FIRE & MARINE INS. CHINARM 812 Shanghai International Trade Center No 2201 Yan an (W) RD Shanghai,China P. R. C. 200335Telephone : 86-21-6209-0498~9, 6208-0080, 6295-4800Facsimile : 86-21-6295-5280

SAMSUNG FIRE & MARINE INS.CHINA, BEIJING BRANCH23F China Merchants Tower No.118, jianguolu, ChaoYang District, Beijing, China. 100022Telephone : 86-10-6566-8100, 2750 Facsimile : 86-10-6566-8140

SAMSUNG FIRE & MARINE INS.CHINA, SHENZHEN BRANCHRoom4601,New World Centre No.6009 Yi'tian Rd.Shenzhen P.R.C(China)Telephone : 86-755-8252-0390 Facsimile : 86-755-8252-0389

SAMSUNG FIRE & MARINE INS.CHINA, SUZHOU BRANCHRM.720, Century Financial Tower #1,Suhua Road Suzhou Industrial Park,Suzhou, Jiangsu,China 215021Telephone : 86-512-6292-5968 Facsimile : 86-512-6292-5977

BRANCH OFFICES

■U.S.A.SAMSUNG FIRE & MARINE INS. CO., LTD.U.S. BRANCH105 Challenger Road 4th Floor Ridgefield Park, New Jersey 07660-05511, U.S.A.Telephone : 1-201-229-6012 Facsimile : 1-201-229-6015

SAMSUNG FIRE & MARINE INS.CO., LTD.,U.S. BRANCH, LA OFFICE14251 Firestone Blvd., La Mirada, CA 90638, U.S.A.Telephone : 1-562-229-0411 Facsimile : 1-562-229-0620

LIAISON OFFICES

■Japan (Tokyo)SAMSUNG FIRE & MARINE INSURANCE CO., LTD.,TOKYO LIAISON OFFICERoppongi T-CUBE 3-1-1, Roppongi, Minato-Ku, Tokyo 106-8532, JapanTelephone : 81-3-6234-2208 Facsimile : 81-6234-2207

■China (Beijing)SAMSUNG FIRE & MARINE INSURANCE CO., LTD.,BEIJING REPRESENTATIVE OFFICE25F China Merchants Tower No.118, jianguolu, Chaoyang District, Beijing, China 100022Telephone : 86-10-6566-8100 Facsimile : 86-10-6566-9408

■China (Qingdao)SAMSUNG FIRE & MARINE INS.CHINA, QINGDAO BranchRm 907, Flagship Tower New World Cyberport, 40, Hongkong Middle Road,Qingdao 266071, ChinaTelephone : 86-532-8502-7271 Facsimile : 86-532-8502-8248

■U.K. (London)SAMSUNG FIRE & MARINE INSURANCE CO., LTD.LONDON REPRESENTATIVE OFFICE21th Floor, Tower 42, 25 Old Broad Street, EC2N 1HP, London UNITEDKINGDOMTelephone : 44-207-786-7851~4 Facsimile : 44-207-786-7866

■INDIASAMSUNG FIRE & MARINE INSURANCE CO., LTD.,INDIA REPRESENTATIVE OFFICE110-025, Suite No. 101, 102 & 103, 1st floor Copia Corporate Suites, Plot No. 9,Jasola Distict Centre, New Delhi, IndiaTelephone : 91-11-4366-1272 Facsimile : 91-11-4366-1299

■SINGAPORESAMSUNG FIRE & MARINE INSURANCE CO., LTD.,SINGAPORE REPRESENTATIVE OFFICE3 Church Street #21-05 Samsung Hub Building, Singapore 049483Telephone : 65-6550-8112 Facsimile : 65-6550-8115

HEAD OFFICE

SAMSUNG FIRE & MARINE INSURANCE CO., LTD.Samsung Insurance Bldg. 87, Euljiro-1ga, Jung-gu, Seoul, Korea 100-782

Telephone : 82-2-1588-5114 Facsimile : 82-2-758-4320

www.samsungfire.com

18,490

20,741

23,092

06FY FY FY07 08

Total Assets(In billions of Korean Won)

Net Profit(In billions of Korean Won)

06FY FY FY07 08

341

477

599

SF&MI realized a a record-high pre-tax profit for the fiscal year. Net profit totaled KRW598.7 billion, which was secondto none in the industry. Direct premiums written were up 6.4% year-on-year to KRW9,744.9 billion, net profit climbed by25.6% to KRW598.7 billion, and adjusted net profit including an increase in catastrophe reserves jumped 27.2% toKRW671.3 billion. Total assets grew 11.3% to KRW23,092.2 billion while catastrophe reserves increased 7.3% toKRW1,059.3billion.

Financial Hightlights

Direct Premiums Written

Increase in Catastrophe Reserves

Investment Profit

Operating Profit

Adjusted EPS (in KRW)

6.4%

41.5%

14.9%

18.4%

31.2%

Summary ofIncome Statements(In billions of Korean Won)

Summary ofBalance Sheet(In billions of Korean Won)

9,74573

888856

15,408

Cash & Equivalents

Stocks

Real Estate

Total Assets

Total Liabilities

Total Liabilities andShareholders’Equity

5.2%

-2.8%

4.9%

11.3%

11.0%

11.3%

5961,9751,088

23,09219,22923,092

102/10305.3 Worldwide Network & Samsung AffiliatesSamsung Fire & Marine Insurance Annual Report 2008

SAMSUNG AFFILIATES


has affiliates in the Samsung Group which includes the below companies.

Finance


Samsung Life Insurance Co., Ltd.

Samsung Card Co., Ltd.

Samsung Securities Co., Ltd.

Samsung Investment Trust Management Co., Ltd.

Samsung Venture Investment Corporation

Other Samsung Companies

Samsung Corporation

Samsung Engineering Co., Ltd.

Cheil Industries Inc.

Samsung Everland Inc.

The Shilla Hotels & Resorts

Cheil Communications Inc.

S1 Corporation

Samsung Lions

Samsung Medical Center

Samsung Economic Research Institute

Samsung Advanced Institute of Technology

Samsung Foundation of Culture

Samsung Welfare Foundation

Electronics

Samsung Electronics Co., Ltd.

Samsung SDI Co., Ltd.

Samsung Electro-Mechanics Co., Ltd.

Samsung Corning Co., Ltd.

Samsung Corning Precision Glass Co., Ltd.

Samsung SDS Co., Ltd.

Samsung Networks Inc.

Chemicals

Samsung Total Petrochemicals Co., Ltd.

Samsung Petrochemical Co., Ltd.

Samsung Fine Chemicals Co., Ltd.

Samsung BP Chemicals Co., Ltd.

Machinery

Samsung Heavy Industries Co., Ltd.

Samsung Techwin Co., Ltd.

Documents

THE GL THE GLOBAL OBAL PIO PIONEER NE 01 CORPORATE …€¦ · SF&MI realized a a record-high pre-tax profit for the fiscal year. Net profit totaled KRW598.7 billion, which was second