[Click eStock] "Samsung Fire & Marine Insurance, Target Price Raised to 380,000 Won"

Meritz Securities on the 16th raised the target price of Samsung Fire & Marine Insurance to 380,000 KRW and maintained a buy rating.

Samsung Fire & Marine Insurance's first-quarter net income attributable to controlling shareholders was 701 billion KRW, exceeding consensus by 14%. This was due to favorable insurance profit and loss and expanded valuation gains on investment profit and loss.

Insurance profit and loss recorded 603.8 billion KRW. Long-term insurance was strong at 446.2 billion KRW. A steady flow of CSM (Contractual Service Margin) amortization based on net increases in CSM balance continues. Despite the impact of large overseas claims and rate cuts, general insurance and automobile insurance profit and loss decreased by only 4% compared to the same period last year.

CSM continues to increase, reaching 13.7 trillion KRW. Although the conversion factor declined due to product revisions and expansion of the GA channel, new contract CSM maintained a level similar to the previous quarter thanks to increased sales volume.

Investment profit and loss excluding insurance finance profit and loss improved significantly to 629.2 billion KRW. This was attributed to strong stock-related valuation gains due to a favorable stock market and 50.6 billion KRW in valuation gains related to alternative investments.

The capital policy announced that shareholder returns (with a medium- to long-term shareholder return rate of 50%) and capital investments will be made on the appropriate capital level of 220% and the excess portion.

Jo Ahae, a researcher at Meritz Securities, said, "The concretization of the shareholder return policy has begun," adding, "Considering the currently overwhelmingly high K-ICS (Korea Insurance Capital Standard) ratio and the small size of surrender value reserves, there is sufficient capacity to expect shareholder returns."