[Click eStock] "Hyundai Marine & Fire Insurance, 2Q Earnings Expected to Exceed Estimates"

[Asia Economy Reporter Lee Jung-yoon] Ebest Investment & Securities maintained a buy rating and a target price of 40,000 KRW for Hyundai Marine & Fire Insurance on the 14th, expecting the company to deliver earnings that exceed market expectations in the second quarter of this year.

Hyundai Marine & Fire Insurance's estimated net profit for the second quarter is 161.5 billion KRW, surpassing market expectations and continuing its strong performance trend. As the improvement in insurance profit and loss continues, the loss ratio is expected to fall to 81.6%, marking the lowest level since the second quarter of 2017. Despite a slowdown in new contracts and an impact of approximately 30 billion KRW from voluntary retirement, the expense ratio is expected to rise compared to the previous quarter, and the general insurance loss ratio is anticipated to increase due to large claims. However, efficiency indicators are expected to continue improving.

Additionally, the automobile insurance loss ratio in the second quarter is expected to be 77.9%, down 0.7 percentage points year-on-year. The long-term risk loss ratio is also projected to decrease by about 3 percentage points year-on-year due to the reduced cost of cataract surgeries, indicating a significant decline in the overall loss ratio.

Jeon Bae-seung, a researcher at Ebest Investment & Securities, explained, "Although upward pressure on automobile loss ratios is expected in the second half, the risk loss ratio is likely to stabilize as the renewal effect takes full effect and loss control measures are implemented. Since incentives for new contracts are low, the expense ratio is expected to remain similar to the first half, and investment returns are also unlikely to change significantly."

He added, "Based on the strong performance in the first half, further profit growth is expected this year, and the recent resurgence of COVID-19 may again provide a reflective benefit."

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