[Click eStock] "Inka Financial Services, Rising GA Dependence... Strong Buy"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment on the 4th gave a buy rating and a target price of 28,700 KRW for Inka Financial Services.

As the separation of insurance development and sales accelerates, expanding the role of insurance agencies (GA), Inka Financial Services, which has secured the largest nationwide sales network, is expected to achieve record-high performance.

GAs partner with multiple insurance companies to sell various insurance products, playing an important role in marketing and sales in the modern insurance industry. In advanced countries such as the United States, GAs account for about 80% of insurance sales, while in Korea, the figure is only around 50-60%.

Recently, as insurance companies are required to reduce business expenses due to the introduction of IFRS17, dependence on GAs is expected to increase further. Researcher Kyusang Kim of Hana Financial Investment explained, “Inka Financial Services is the GA company with the largest sales force in Korea,” adding, “By securing strong brand awareness, it has established a virtuous cycle structure where excellent new planners are continuously recruited.”

Furthermore, the concentration of personnel in large GA companies is also expected to accelerate. Inka Financial Services plans to expand recruitment from the current level of about 10,000 to 30,000-40,000 in the future, predicting continued sales growth.

This year, Inka Financial Services’ sales and operating profit are expected to increase by 19.4% and 55.9% year-on-year to 374.5 billion KRW and 32.9 billion KRW, respectively. The implementation of the “1200% rule,” which limits the first-year recruitment commission paid to insurance planners to no more than 1200% of the monthly premium, will defer the portion exceeding 1200%, reflecting fully this year. The operating profit margin is expected to rise compared to the previous year due to the operating leverage effect from increased sales.

Finally, Researcher Kim analyzed, “It has a valuation that is extremely undervalued compared to surrounding companies,” adding, “This is the biggest investment point, so active buying is necessary.”