[Edaily Reporter Shin Ha-yeon] On the 9th, Shinhan Investment Securities assessed that Hyundai Marine & Fire Insurance is expected to show defensive stock price performance during a period of increased market volatility. The firm maintained its “Buy” rating and target price of 45,000 won.

Lim Hee-yeon, a research analyst at Shinhan Investment Securities, stated, “We anticipate a defensive stock performance during periods of heightened market volatility due to the company’s relatively high interest rate sensitivity within the sector and expectations of benefits from the application of managed benefits.”

She cited interest rate sensitivity as a key investment point for Hyundai Marine & Fire Insurance. The analysis suggests that, unlike other major non-life insurers, Hyundai Marine & Fire Insurance experiences a positive effect on its capital during periods of rising interest rates.

Research Analyst Lim explained, “When interest rates rise by 100 basis points (1bp = 0.01 percentage point), the capital sensitivity is 8.2%,” adding, “Unlike other major non-life insurers, the company experiences a positive capital effect during periods of rising interest rates.” He continued, “This is due to a mismatch in asset and liability durations, making the company a potential beneficiary of rising interest rates in the current environment.”

The possibility of improved loss ratios for health insurance due to the implementation of managed benefits was also cited as a positive factor. With the implementation of managed care benefits confirmed to begin on July 1, manual therapy will be limited to 43,850 won per session (based on a minimum of 30 minutes per session), twice a week, and up to a maximum of 24 sessions per year based on medical judgment. Concurrent billing with other similar treatments is restricted, and basic physical therapy or simple rehabilitation must be performed first before manual therapy.

Researcher Lim stated, “The reimbursement criteria for manual therapy will be reevaluated every three years, and detailed standards are planned to be established in the future,” adding, “The company’s annual deficit related to actual-cost insurance is estimated to be around 570 billion won.”

Hyundai Marine & Fire Insurance is projected to see a significant improvement in profitability if the medical expense loss ratio declines in the future, as it has a relatively high proportion of medical expense coverage within its risk premiums and a high medical expense loss ratio compared to the top three insurers. Shinhan Investment Securities estimated that medical expense coverage accounts for approximately 39% of Hyundai Marine & Fire Insurance’s risk premiums.

Research Analyst Lim noted, “Among the top three insurers, Hyundai Marine & Fire Insurance has a high proportion of medical expense insurance within its gross premiums—39%—and a high medical expense loss ratio, so a decline in the medical expense loss ratio is expected to lead to a clear improvement in profitability.” He added, “Consequently, an improvement in the medical expense loss ratio could serve as a clear factor for upward valuation.” He continued, “It is estimated that a 1 percentage point reduction in the actual medical expense loss ratio would result in an annual reduction in accident insurance payouts of approximately 21 billion won.”

However, he viewed the likelihood of a resumption of dividends as limited. Research Fellow Lim noted, “While valuation pressures are limited,” he added, “considering the plan to adjust discount rates scheduled through 2035, we judge that the likelihood of a relaxation of the industry-wide surrender reserve system and a resumption of dividends is low.”

He added, “There is also a possibility that the stock’s appeal could decline if market trends shift back toward AI and semiconductors.”

Shinhan Investment Securities estimated Hyundai Marine & Fire Insurance’s price-to-book ratio (PBR) for this year at 0.49x and its price-to-earnings ratio (PER) at 3.5x. It projected a return on equity (ROE) of 15.3% for 2026.