[Click eStock] "Korean Re, Clear Decline in Loss Ratio... Target Price Up 18%"

[Asia Economy Reporter Park Jihwan] Yuanta Securities maintained a 'Buy' rating on Korean Re on the 14th, noting that the loss ratio improvement is significantly better than expected, and raised the target price by 18.2% from the previous 11,000 KRW to 13,000 KRW.

Researcher Jeong Taejun of Yuanta Securities said, "the separate basis profit for Q1 was 56.5 billion KRW, significantly exceeding the market expectation of 50 billion KRW," adding, "excluding the impact of exchange rates, the insurance profit and loss was in line with estimates, but the notably better-than-expected loss ratio was encouraging."

It is analyzed that the improvement in the loss ratio due to additional increases in reinsurance premiums and a decrease in COVID-19 related losses is stronger than expected. Despite reflecting approximately 27 billion KRW in COVID-19 related losses in the overseas segment, the loss ratio meeting estimates supports this view.

The household insurance loss ratio was 97.3%, improving by 1.3 percentage points year-on-year and rising by 7.9 percentage points quarter-on-quarter, in line with estimates. The expense ratio was 4.6%, increasing by 1.3 percentage points year-on-year and higher than estimated.

Researcher Jeong stated, "The overseas insurance loss ratio was 70.0%, up 1.8 percentage points year-on-year and improved by 1.3 percentage points quarter-on-quarter."

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