[Click eStock] "Hyundai Marine & Fire Insurance Highlights Strengths Such as Healthy Debt and Improving Performance"

[Asia Economy Reporter Park Jihwan] On the 25th, SK Securities presented a 'Buy' investment opinion and a target price of 31,000 KRW for Hyundai Marine & Fire Insurance, highlighting its relatively favorable debt structure and earnings improvement this year as advantages.

Researcher Koo Kyung-hoe of SK Securities stated, "Among insurance stocks, it shows relatively good investment attractiveness," and analyzed, "the small gap between the long-term insurance burden rate and asset management yield, the decline in loss ratio due to automobile insurance premium increases, stable expense ratio, and favorable investment yield all contribute to expected solid performance."

Currently, the insurance sector is facing negative investor sentiment due to prolonged low interest rates and the 2023 debt fair value evaluation. The biggest issue for insurance stocks is that operating profits have decreased compared to the money to be returned to customers because of low interest rates.

Researcher Koo explained, "Hyundai Marine & Fire Insurance is not free from this burden, but it is relatively less affected," adding, "Hyundai Marine & Fire Insurance's investment operating yield has exceeded the long-term insurance burden rate for six consecutive years since 2014."

He emphasized, "With the implementation of IFRS17 from 2023, insurance companies' liabilities will be evaluated at fair value, which will reduce Hyundai Marine & Fire Insurance's equity capital; however, since the long-term burden rate is relatively low, the reduction will be comparatively small."