[Click eStock] "DB Insurance, Focus on Improvement in Loss Ratio and Operating Expenses"

[Asia Economy Reporter Park Jihwan] Daishin Securities evaluated on the 20th that DB Insurance showed a greater-than-expected improvement in loss ratio, which directly affects performance due to the impact of the novel coronavirus disease (COVID-19). Accordingly, it maintained its investment opinion of 'Buy' and a target stock price of 65,000 won.

Researcher Park Hyejin of Daishin Securities explained, "The loss ratio of automobile insurance was initially expected to improve by 4-5%, but due to COVID-19, an improvement beyond that is anticipated." She added that the per-vehicle elapsed premium is on a continuous upward trend, while the cost increase of automobile insurance premiums is already sufficiently covered.

Furthermore, the risk loss ratio of long-term insurance is also expected to decline slightly this year. Researcher Park said, "The risk loss ratio of long-term insurance this year is expected to remain at the current level but with a slight decline," and evaluated, "Improvement in the risk loss ratio is expected from 2021, and contract retention rates are also improving due to eased competition." She added that products with exclusive usage rights can be sold until July, and all sales channels including exclusive and corporate agencies (GA) are showing favorable sales.

Operating expenses are also normalizing. At one point, the commission rate reached 400-500% due to competition among GAs, but in the first quarter, it is evaluated to have returned to a normal level of 150-200%.

Researcher Park also explained about the investment sector, "The ordinary investment yield is in the low 3% range, and the asset management yield excluding bond disposal gains has been on the rise following last year."

This content was produced with the assistance of AI translation services.