[Click eStock] "Hanwha Life expects benefits from rising interest rates... Target price up 40%"

[Asia Economy Reporter Ji-hwan Park] Yuanta Securities maintained a 'Buy' rating on Hanwha Life Insurance on the 19th, stating that the company is highly likely to realize profit growth supported by the rising interest rate trend, and raised the target price by 40% from the previous 2,500 KRW to 3,500 KRW.

Researcher Tae-joon Jeong of Yuanta Securities said, "We raised this year's earnings estimates by 17% reflecting the rise in interest rates." When interest rates rise, variable guarantee reserves are reversed, leading to a decrease in the transfer amount to liability reserves, which results in an increase in return on equity (ROE). He also analyzed that the scale of loss contracts in the Liability Adequacy Test (LAT) has decreased, reducing concerns about deficits.

Furthermore, with an expected increase in exclusive product sales and non-life insurance product sales, the loss ratio this year is forecasted to improve compared to last year.

Researcher Jeong said, "The solvency capital ratio (RBC) in the fourth quarter of last year was 238.7%, up 3.7 percentage points from the same period the previous year." He emphasized, "Although concerns about capital adequacy had been chronic, steady expansion of asset duration and the recent rebound in interest rates have significantly alleviated worries related to the introduction of the new solvency regime (K-ICS) and the strengthening of the LAT system."

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