Hanwha Life Insurance Shows Clear Earnings Improvement... Target Stock Price Up 25%

[Asia Economy Reporter Park Ji-hwan] Kyobo Securities on the 15th raised the target price for Hanwha Life from 4,000 won to 5,000 won, a 25% increase, citing a clear improvement in earnings.

Kim Ji-young, a researcher at Kyobo Securities, stated, "Net profit in the first quarter of this year was 194.2 billion won, an increase of 306.1% compared to the previous year, and it turned to a profit compared to the previous quarter." Thanks to improvements in non-trading and trading gains, as well as stock price increases and rising interest rates, trading gains also showed a favorable level. Additionally, the burden of reserve liabilities decreased compared to the same period last year.

The risk loss ratio in the first quarter was 80.6%, down 6.4 percentage points from the same period last year. Compared to the previous quarter, it recorded an increase of 1.6 percentage points. The improvement in the risk loss ratio is expected to continue, with sustained growth in risk premiums due to increased sales of general protection insurance and stabilization of claim payments due to a base effect compared to the previous year.

The expense ratio (compared to earned premiums) was 17.0%, up 0.6 percentage points and 1.5 percentage points compared to the same period last year and the previous quarter, respectively, due to a decrease in earned premiums. Investment income was 929.9 billion won, down 11.7% compared to the same period last year. Compared to the previous quarter, it increased by 10.0%, resulting in an operating asset yield of 3.83%.

Hanwha Life's earned premiums in the first quarter were 3.197 trillion won, down 6.4% compared to the same period last year due to reduced face-to-face activities caused by COVID-19. However, premiums from high-yield general protection insurance grew by 26.7%, indicating continued qualitative growth. The RBC ratio as of the first quarter was 205.0%, down 40.6 percentage points from the same period last year. This was caused by a decrease in valuation gains on available-for-sale securities due to rising interest rates.

Researcher Kim Ji-young said, "Reflecting the increase in investment income due to rising market interest rates and the reduction in variable insurance reserve burdens, earnings improvement is expected this year, leading to a 23.0% upward revision from previous forecasts," adding, "the sales effect centered on protection insurance and the growth of insurance company platforms due to judicial separation are also expected."

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