[Click eStock] "Hanwha Sonbo, This Year's Performance Growth Accelerates... Industry's Highest Net Profit Growth Rate Expected"

[Asia Economy Reporter Park Jihwan] Hana Financial Investment maintained a 'Buy' rating and a target price of 5,600 KRW for Hanwha General Insurance on the 4th, stating that the current stock price appears to be excessively undervalued considering the speed of the earnings turnaround.

Researcher Lee Hongjae of Hana Financial Investment said, "Last year, Hanwha General Insurance achieved a net profit of 88.4 billion KRW, successfully turning profitable compared to the previous year," and "the annual combined ratio improved by 3.8 percentage points from the previous year to 107.9%." This improvement was due to the loss ratio and expense ratio improving by 0.1 percentage points and 3.8 percentage points respectively compared to the previous year. In particular, the long-term business ratio significantly declined year-on-year due to a decrease in new long-term insurance contract sales.

Hanwha General Insurance is expected to have the highest net profit growth rate within the non-life insurance sector this year. Researcher Lee Hongjae analyzed, "The net profit growth rate this year is estimated at 29.0%, as the combined ratio base is higher compared to other companies, and the revision of sales commissions along with a relaxation in new contract competition within the insurance industry is expected to improve the long-term incurred expense ratio." Additionally, about 37% of Hanwha General Insurance's total indemnity insurance contracts will be renewed this year, which is also identified as a factor improving profitability.

Lee predicted, "Since Hanwha General Insurance was included in the management target and raised indemnity insurance premiums by an average of 56% last year, it is expected to be the only non-life insurer this year to improve the long-term risk loss ratio by 5.3 percentage points compared to the previous year."