[Click eStock] "Samsung Fire & Marine Insurance, Additional Shareholder Return Measures Expected... Target Price Up 16.3%"

Expectations for Additional Refund Policy After Value-Up Program
Insurer Fully Capable Considering 2023 4Q Performance
CSM's 2023 Growth at 13.3 Trillion, "Highest Level in Industry"

On the 23rd, Samsung Securities analyzed that further capital policy concretization is expected following the confirmation of the corporate value-up program for Samsung Fire & Marine Insurance. They maintained a 'Buy' investment rating and raised the target price by 16.3% from the previous 310,000 KRW to 350,000 KRW. Samsung Securities' closing price on the 22nd was 301,000 KRW.

Jung Minki, a researcher at Samsung Securities, stated, "Samsung Fire & Marine Insurance's 2023 dividend per share (DPS) increased by 16% year-on-year to 16,000 KRW," adding, "Although no separate dividend policy was announced at the recent earnings briefing, the possibility of reconsidering capital utilization plans, including share buybacks and cancellations, was mentioned following the government's confirmation of the corporate value-up program on the 26th."

He added, "Considering the high fourth-quarter new solvency ratio (K-ICS) of 272% and the capacity to secure new contract CSM based on this, Samsung Fire & Marine Insurance is judged to be a differentiated insurer within the industry in terms of mid- to long-term capital utilization policies."

Samsung Fire & Marine Insurance's consolidated net income attributable to controlling interests for the fourth quarter of 2023 was 175.2 billion KRW, which was 8.4% below the consensus (market average forecast). Researcher Jung explained, "A loss burden contract cost of 62.8 billion KRW occurred due to changes in year-end actuarial assumptions such as contract retention rates, and the insurance claims and business expenses turned to a deficit due to seasonal increases in losses in the fourth quarter and expanded infrastructure investments."

Samsung Securities' insurance contract service margin (CSM) for 2023 was 13.3 trillion KRW. Researcher Jung said, "It recorded the highest growth within the insurance sector excluding Samsung Life Insurance," adding, "Although CSM decreased by 1.2 trillion KRW last year due to the introduction of actuarial guidelines and experience adjustments, new contract CSM inflows of 3.5 trillion KRW during the same period offset this decline."