[Click eStock] "DB Sonbo, All Aspects of Performance Are Excellent... Target Price Up 11%"

[Asia Economy Reporter Ji-hwan Park] Yuanta Securities maintained a 'Buy' rating on DB Insurance on the 13th, citing excellent performance across all business segments, and raised the target price by 10.8% from the previous 65,000 KRW to 72,000 KRW.

Researcher Tae-joon Jeong of Yuanta Securities stated, "Second-quarter profit reached 234.3 billion KRW, surpassing the market expectation of 195.3 billion KRW," and "the general insurance and automobile insurance segments showed better-than-expected loss ratios, and despite the expansion of new contract sales, net business expenses met estimates, resulting in a lower-than-expected expense ratio," he analyzed.

He viewed positively the fact that there were no gains from the disposal of financial assets in investment operating profit due to strong insurance operating profit. Researcher Jeong said, "With the introduction of IFRS17 and entering the second year of first-year expense regulation, an overall increase in expense ratios across the industry is expected," adding, "However, since DB Insurance has demonstrated differentiated expense competitiveness, it is expected that relatively favorable profit trends can continue."

The general insurance loss ratio was 59.6%, better than estimates. Last year, there was a sharp increase in the annual general insurance loss ratio due to typhoon damage, but it is expected to stabilize downward this year. In particular, the automobile insurance loss ratio improved rapidly to 76.2%, with the combined ratio improving to 91.0%, raising expectations for achieving an annual surplus. However, the long-term insurance loss ratio exceeded estimates at 84.7%, which was analyzed as due to an increase in claims caused by the temporary easing of COVID-19 spread.

Researcher Jeong emphasized, "Although investment operating profit decreased by 12.5% year-on-year and 9.9% quarter-on-quarter, falling short of estimates, the absence of gains from the disposal of financial assets, supported by strong insurance operating profit, is viewed positively."

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