[Click eStock] "Samsung Life Insurance, Noted as a Key Affiliate"

Daishin Securities "Maintains Samsung Life Insurance Target Price at 95,000 Won"
One-time Gains Significantly Reflected in Q1... Investment Gains Expected to Decrease in Remaining Quarters but Provide Flexibility

[Asia Economy Reporter Gong Byung-sun] Samsung Life Insurance's net profit is expected to increase as Samsung Electronics' special dividend gains are reflected. Although investment gains in the 2nd, 3rd, and 4th quarters are likely to decrease due to a significant one-time gain in the first quarter of this year, it is shown to provide flexibility. Accordingly, Daishin Securities maintained Samsung Life Insurance's target stock price at 95,000 KRW and an investment rating of 'Buy.'

Samsung Life Insurance's net profit for the first quarter of this year is expected to exceed the market forecast of 842.6 billion KRW by 13.5%. The strong first-quarter performance is due to Samsung Electronics' special dividend gain of 801.9 billion KRW and the reversal of variable annuity reserve. Park Hye-jin, a researcher at Daishin Securities, explained, "Considering that Samsung Life Insurance's sensitivity to variable annuity reserves is 40 to 50 billion KRW per 100 points of the KOSPI index, we reflected a reversal amount of 180 billion KRW for the first quarter."

With a significant one-time gain reflected in the first quarter of this year, investment gains for the remaining quarters are expected to decrease. Contrary to the initial prediction that part of the dividend gains would be allocated to non-dividend contract holders, it is expected that the entire amount will be reflected in the first quarter. However, there is also an analysis that the one-time gain can provide flexibility in asset management. Researcher Park evaluated, "Flexibility is positive in that it enhances Samsung Life Insurance's intrinsic value."

The loss ratio is expected to record the mid-80% range, similar to last year. Despite the recent impact of COVID-19, neither non-life insurance nor life insurance has established a clear direction for the loss ratio. Researcher Park said, "Since the reserve for Incurred But Not Reported (IBNR) losses was set aside last month along with reinsurance costs, the direction of the loss ratio has not been determined," and added, "We expect the loss ratio to be 84.2% this year."

The long-term guaranteed annualized premium equivalent (APE) is expected to record 478.4 billion KRW, a 7.7% decrease compared to the same period last year. This is interpreted as a base effect due to the reduction in the assumed interest rate in the first quarter. There is also a prediction that the new contract margin will increase as the proportion of health and accident insurance rises compared to whole life insurance.

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