[Click eStock] Samsung Fire & Marine Insurance, Unexplained Dividend Cut 'Downgrade'

[Asia Economy Reporter Junho Hwang] Hana Financial Investment lowered the target price of Samsung Fire & Marine Insurance to 280,000 KRW on the 22nd.

Hana Financial Investment found the reason for the target price downgrade in the fact that the dividend payout ratio dropped to 43.7% (common stock) last year. Despite a low return on equity, the dividend payout ratio based on an overwhelming capital adequacy advantage was the main reason for setting the target price, but the target price was lowered due to policies that went against this.

Although the current dividend payout ratio is still at a high level, it was considered to be below the dividend payout guidance presented in 2019 and the level announced by Samsung Fire & Marine Insurance just a few months ago.

In particular, adjusting the dividend payout ratio without providing reasonable justification could unnecessarily heighten market concerns and was evaluated as going against the trend of enhancing shareholder value by competitors.

Researcher Hongjae Lee of Hana Financial Investment stated, "Although regulatory uncertainty was somewhat high recently, the increase in actual loss insurance premiums rose compared to the previous year, and automobile insurance premiums ended with a 1.2% decrease, so short-term risks are judged to have been largely resolved."

He also analyzed, "This automobile insurance premium reduction will be fully reflected in performance only in 2023, but considering the effect of improvements in the personal injury insurance system, the medium- to long-term loss ratio outlook is expected to be stable, and this year, the transition to the 4th generation actual loss insurance contracts is expected to accelerate."

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