[Edaily Reporter Kim Kyung-eun ] Align Partners Asset Management announced on the 22nd that it “views positively” the value-enhancement plan of DB INSURANCE(005830). This is because the plan strengthens capital efficiency and shareholder returns. However, the firm also urged the company to actively utilize share buybacks and cancellations over dividends during periods of undervaluation and to take steps to improve corporate governance, such as strengthening board independence.

Align Partners recently delivered a Seohan to the DB Insurance board of directors, containing an evaluation of the corporate value enhancement plan announced by DB Insurance on the 28th of last month, along with requests for improvements.

In this value-enhancement plan, DB Insurance set its 2030 shareholder return rate targets at 40% on a consolidated basis and 50% on a standalone basis. The company plans to raise its previous target of 35% on a standalone basis for 2028 and increase its dividend per share (DPS) by at least 10% annually.

The company also specified its capital management standards. It set a target range of 150–220% for the Solvency Ratio (K-ICS) and 100–400% for the Dividend Coverage Ratio (DCR). The company has established K-ICS at 180% and DCR at 200% as safety thresholds, and will consider additional shareholder returns if K-ICS exceeds 220% or DCR exceeds 400%.

For new policies and investments, a Return on Risk (ROR) of 200%—which represents the benefit relative to required capital—will be applied as the minimum standard. The company’s policy is to avoid excessive competition to expand the Contract Service Margin (CSM) and instead focus on growth centered on capital efficiency.

Align Partners assessed that this direction largely reflects the “ROR-based, risk-adjusted profitability-focused management strategy” and the “medium-term capital management and shareholder return policy through K-ICS tier-based required capital management” that it had demanded of DB Insurance last February. Align Partners sent an open Seohan containing eight improvement proposals to the DB Insurance board of directors last February, demanding the re-release of the value-up plan, and followed up with additional Seohans in March and June.

However, it pointed out that the policy on share buybacks and cancellations requires further improvement. In this plan, DB Insurance presented share buybacks as a measure to be utilized only when the stock price is significantly undervalued. In response, Align Partners argued that the criteria for determining undervaluation should be clarified and that share buybacks and cancellations should be utilized, alongside dividends, as ongoing capital allocation tools.

According to Align Partners, DB Insurance’s price-to-book ratio (PBR) was 0.82x based on the closing price on the 21st. The adjusted PBR, calculated based on the enterprise value (EV)—which includes the cash flow from operations (CSM) ultimately attributable to shareholders—stands at approximately 0.58x.

Align Partners believes that in a situation where the stock price is below intrinsic value, share buybacks and cancellations can increase the intrinsic value per share. They argued that while the company should pay dividends sufficient to meet the requirements for separate taxation of dividend income, any funds for shareholder returns exceeding that amount should, in principle, be allocated to share buybacks and cancellations. They also called for additional shareholder returns should distributable profits increase in the future due to the relaxation of the policy on reserves for surrender refunds.

They also identified communication with shareholders and improvements to corporate governance as key tasks. They proposed making annual institutional investor roundtables—with direct participation by the board of directors and top management—a regular event, and restructuring executive compensation to focus on shareholder value-linked metrics and equity-based incentives. They added that measures to strengthen board independence—such as appointing an independent director as chair and maintaining a composition of independent directors recommended by institutional investors—should be further detailed.

Lee Chang-hwan, CEO of Align Partners, said, “We highly commend DB Insurance’s management and board of directors for proactively reviewing shareholders’ proposals, clearly defining a direction toward sustainable, balanced growth centered on capital efficiency, and presenting significantly improved medium- to long-term goals.”

He continued, “This plan is the first step toward restoring shareholder value at DB Insurance, and its success depends on future implementation,” adding, “We will closely monitor the progress of the plan’s implementation and whether necessary adjustments are made, and we will continue to engage in constructive communication with the company.”