[Click eStock] "Market Interest Rates Rebound Trend... Hanwha Life, Biggest Beneficiary of Rising Rates"

[Asia Economy Reporter Ji-hwan Park] Yuanta Securities evaluated Hanwha Life Insurance Hanwha Life Insurance on the 23rd, stating that market interest rates have rebounded after hitting a low in August, and it appears to be the biggest beneficiary of rising market interest rates. Accordingly, the investment rating was upgraded from 'Neutral' to 'Buy', and the target price was raised from 2,100 KRW to 2,300 KRW.

Researcher Tae-joon Jeong of Yuanta Securities said, "Hanwha Life Insurance's profit next year is expected to increase by 14.6% year-on-year to 276.6 billion KRW," adding, "Insurance profit is expected to improve compared to this year due to the disappearance of the impact of the first-quarter guaranteed insurance sales suspension, improvements in the actual loss insurance system, and a decline in expense ratios."

Investment profit is expected to decline due to a decrease in non-recurring investment gains, but this is considered positive as it coincides with a decrease in the reserve for policyholders' dividends. In particular, the reserve for policyholders' dividends is sensitive to interest rates and is expected to benefit the most from rising interest rates.

Insurance profit is expected to increase compared to this year. The impact of the first-quarter guaranteed insurance sales suspension caused by the reduction in the assumed interest rate will disappear, and excessive claims are expected to decrease due to improvements in the actual loss insurance system.

Researcher Jeong forecasted, "Market interest rates have rebounded after hitting a low in August," and "If this upward trend continues, overall life insurance business can expect improvements in investment profit and reserve for policyholders' dividends." However, he pointed out that a large increase in interest rates could lower the Risk-Based Capital (RBC) ratio, which is a risk factor.