"Mirae Asset Life Insurance, Running Alone Amid Insurance Industry Downturn"

[Asia Economy Reporter Park Jihwan] Daishin Securities maintained a 'Buy' investment rating and a target price of 5,500 KRW for Mirae Asset Life on the 29th, stating that despite the overall profitability decline in the insurance industry last year, the company achieved its highest profit.

Researcher Park Hyejin of Daishin Securities said, "Despite the challenging environment, net profit in 2019 recorded 100 billion KRW, a 33.5% increase compared to the previous year," adding, "Considering the poor annual profits of major large companies due to the interest rate environment, this is a quite impressive performance."

This strong performance is analyzed to be due to an increase in non-operating income from cost efficiency and the visible effects of voluntary retirement programs implemented until 2018.

Researcher Park Hyejin stated, "Fee-biz commissions generated from variable insurance and retirement pensions increased by 5% compared to 2018, resulting in annual commission income of 60 billion KRW," and added, "Considering that the profits of major large companies in the fourth quarter significantly decreased due to the burden of variable guarantee reserves, this performance was commendable."

Researcher Park added, "Unlike other companies, the low proportion of general protection insurance kept the loss ratio from being high, and the annual premium equivalent (APE) of long-term protection insurance was 64.9 billion KRW, showing a significant effect with a 22.5% increase compared to the same period last year despite the difficult sales environment."

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