[Click e-Stock] "DB Insurance, Somewhat Disappointing Value Enhancement Plan"

On April 22, Korea Investment & Securities maintained its "Buy" investment rating on DB Insurance and set a target price of 115,000 won.

Hong Yeran, a researcher at Korea Investment & Securities, gave high marks to DB Insurance's profitability.

She explained, "DB Insurance has maintained its 13th-month persistency rate at around 90% each quarter, even in a competitive new contract environment. Despite the conservative revision of the lapse rate assumption for non-surrender and low-surrender products in the fourth quarter of 2024, the CSM multiple actually rose to 18.4 times, which demonstrates the company's strong profit-generating capability."

She added, "However, due to the cumulative effect of reductions in auto insurance premiums, the auto insurance segment is expected to record a loss of 6.8 billion won in 2025."

DB Insurance is also expected to continue managing its capital ratio in a stable manner. Hong noted, "As of the end of 2024, the K-ICS ratio is 203.1%. The impact of the introduction of regulatory measures such as the scheduled final observation maturity through 2027 is expected to decrease the K-ICS ratio by around 5% each year. Nevertheless, even taking this into account, the capital ratio is projected to remain above 200%."

However, she expressed some disappointment regarding the value enhancement plan announced in February.

Hong explained, "The core of the plan is to increase the shareholder return ratio to 35% by 2028, and to set the minimum and maximum K-ICS ratio targets at 200% and 220%, respectively. Given that the current PBR is below 1, which makes share buybacks and cancellations particularly effective, it is disappointing that these measures were not included in the plan."

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