[Edaily Reporter Hyera Lee ] On the 22nd, DaishinSecurities projected that both insurance and investment earnings for DB INSURANCE(005830)would improve in the second quarter. The firm maintained its “Buy” rating and target price of 200,000 won.

Park Hye-jin, an analyst at DaishinSecurities, stated, “The loss ratio, which surged in the first quarter due to high-value claims, is expected to stabilize in the second quarter, contributing to an improvement in underwriting profit, and investment profit is also projected to be quite favorable due to rising market indices.” She added, “Net profit is likely to recover to the 500 billion won range for the first time in eight quarters.”
DaishinSecurities estimated DB INSURANCE’s second-quarter net profit at 514 billion won. This represents a 91.6% increase from the previous quarter and an 11.8% increase year-over-year, exceeding the market consensus by 6.2%.
The firm expects both underwriting and investment results to improve.
He predicted, “In the first quarter, the loss ratio rose to 101.7% due to one-time factors such as a sharp increase in surgical expenses under third- and fourth-generation medical expense insurance and high-value claims related to traffic accident settlement support funds; however, as these factors subside, the loss ratio is expected to fall to around 97% in the second quarter.”
In particular, with both general insurance and auto insurance posting profits, total insurance profit is projected to reach 354 billion won, a 32.4% increase year-over-year.
Investment income is also expected to post solid results, driven by increased valuation gains on FVPL (financial assets at fair value through profit or loss) stocks.
The Contractual Service Margin (CSM) for new policies is expected to decline due to a decrease in life insurance revenue. He added, “However, since the impact of changes to loss ratio assumptions for simplified insurance products is scheduled to be reflected in the fourth quarter, the adjustment to CSM this quarter will not be significant.” The CSM balance at the end of the period is estimated to be 13 trillion won, a 1.3% increase from the previous quarter.
Analyst Park highlighted the possibility that DB INSURANCE will announce a new value-enhancement policy in the second half of the year. The analysis suggests that expectations remain high following the completion of the acquisition of Fortegra, a U.S.-based property and casualty insurer. He assessed, “There is a high likelihood that the new value-enhancement policy will be announced around September,” adding, “Considering Fortegra’s contribution to profits in the second half of the year, further dividend increases are possible, resulting in an expected dividend yield of 5.3%—the highest among the insurers analyzed.”