[Click eStock] "Hyundai Marine & Fire, Expected to Prove Earnings Power in Q2"

[Asia Economy Reporter Park Jihwan] Daishin Securities stated on the 12th that it expects Hyundai Marine & Fire Insurance to demonstrate stable earning power in the second quarter. Accordingly, it maintained a 'Buy' investment rating and a target price of 32,000 KRW.

Park Hyejin, a researcher at Daishin Securities, explained, "Hyundai Marine & Fire Insurance is performing well in automobile, operating expenses, and long-term sectors," adding, "The second quarter, which has no downside, is expected to prove its earning power."

Since the industry has generally raised automobile insurance premiums by more than 10% from January last year to March this year, it is analyzed that the automobile insurance loss ratio is inevitably improving.

Researcher Park said, "The automobile insurance loss ratio dropped to the 81% range by May," and forecasted, "June is typically the month with the lowest loss ratio of the year, so a significant improvement in automobile insurance loss ratio is expected from the second quarter."

The reduction in operating expenses is expected to continue in the second quarter as well. In particular, the decrease in operating expenses including sales commissions is notable.

Researcher Park evaluated, "The actual operating expenses are 400 million to 5 billion KRW lower per month than the planned expenses, and since new life insurance contracts are performing well due to the Min-sik Act and the resulting boost in driver insurance sales, there is currently no likelihood of operating expenses increasing in June."

He added, "In the last second quarter, bond sale gains were recorded over 50 billion KRW more than the usual level, and since bond disposals have not been made since April this year, the profit level itself is expected to be similar," and projected, "The improvement effect on insurance operating profit will also be significant."

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