Samsung Fire & Marine Insurance Target Price 275,000 Won... Expected Benefit from Long-Term Interest Rate Increase

[Asia Economy Reporter Park So-yeon] Kyobo Securities has set a target price of 275,000 KRW for Samsung Fire & Marine Insurance and maintained a buy rating.

According to FN Guide on the 1st, Kyobo Securities recently stated in a report on Samsung Fire & Marine Insurance that "As the number one non-life insurer in Korea, long-term benefits from rising interest rates are expected."

Researcher Kim Ji-young of Kyobo Securities said, "The increase in Samsung Fire & Marine Insurance's net profit is due to improved insurance operating profit from a decline in general and automobile insurance loss ratios and expense ratios, as well as an increase in investment operating profit."

In 2021, Samsung Fire & Marine Insurance's overall loss ratio was 82.2%, down 1.1 percentage points (p) from the previous year. The general insurance loss ratio improved by 6.6 p to 75% compared to the previous year.

The automobile insurance loss ratio fell by 3.7 p to 81.9%, reflecting the visible effects of a decline in accident rates and premium increases.

Regarding the long-term insurance loss ratio, it rose by 0.8 p to 83.4% compared to the previous year, due to an increase in risk loss ratio. Guaranteed premiums increased by 7.1% year-on-year, attributed to a rise in retention rates.

Samsung Fire & Marine Insurance's investment operating profit in 2021 was 2.0958 trillion KRW, up 7.3% from the previous year, due to a 65.6% increase in dividend income year-on-year.

Accordingly, the pre-tax investment yield rose by 0.2 p to 2.7% compared to the previous year. As of the end of 2021, Samsung Fire & Marine Insurance's RBC ratio (consolidated basis) was 304%, marking a 3.2 p increase from the previous year.

Researcher Kim Ji-young said, "In 2022, the performance improvement trend is expected to continue due to the effects of increased actual loss insurance premiums and strengthened underwriting," adding, "The benefits from rising interest rates following the full-scale base rate hikes after the COVID-19 pandemic are also expected to be greater compared to competitors."

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