[Click eStock] "Samsung Fire & Marine, Most Clear Profit Increase Potential in Insurance Sector for Q2"

[Asia Economy Reporter Park Ji-hwan] Yuanta Securities stated on the 15th that Samsung Fire & Marine Insurance is expected to have the clearest profit growth potential in the insurance sector in the second half of the year, recommending a 'Buy' rating and a target price of 280,000 KRW.

Jeong Tae-jun, a researcher at Yuanta Securities, forecasted, "The loss ratio for long-term and automobile insurance is expected to improve, while the increase in expense ratio will also slow down," adding, "Annual profits are expected to increase by 14.3% compared to the previous year."

Unlike competitors, Samsung Fire & Marine Insurance has no bond sale gains that need to be reduced, which dilutes the improvement in insurance operating profit, making the visibility of profit growth the clearest. Additionally, the improvement in the combined ratio in the industry's only automobile insurance direct channel is also seen as encouraging.

The long-term insurance loss ratio in the second half is expected to improve compared to the first half and the same period last year. Researcher Jeong Tae-jun stated, "The long-term risk loss ratio is expected to show significant improvement in the second and third quarters," explaining, "This is because the effect of reduced hospital visits due to COVID-19 in the first half is expected to be reflected in the second and third quarters due to claim deferrals."

He emphasized, "The non-risk loss ratio will decrease in improvement due to last year's premium reductions, but the improvement trend itself is expected to continue," and "Although the automobile insurance loss ratio will rise compared to the first half due to seasonality, it is expected to improve compared to the same period last year."

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