Meritz Securities announced on the 21st that it maintains a target price of 6,400 KRW and a buy rating for Dongyang Life Insurance.
Dongyang Life Insurance's net profit for the first quarter was 88.5 billion KRW, significantly exceeding consensus expectations. This was attributed to stable investment gains.
Insurance profit recorded 56.3 billion KRW. The amortization of CSM (Contractual Service Margin) was similar to the same period last year despite a net increase in the CSM balance due to a decrease in the amortization rate. Due to changes in the IBNR (Incurred But Not Reported) system, 15 billion KRW was recognized.
The CSM increased to 2.7 trillion KRW, maintaining its upward trend. Although the new contract CSM multiple declined, the increase in sales of short-term payment whole life insurance and health insurance contributed to the net increase in CSM.
Investment gains of 51.9 billion KRW were well defended considering last year's large securities valuation gains and losses and an additional 25 billion KRW provision related to loan assets in the first quarter.
The K-ICS (Korean Insurance Capital Standard) ratio fell to 173% due to strengthened discount rate regulations and the impact of subordinated bond repayments.
Jo Ahae, a researcher at Meritz Securities, stated, "The net increase in CSM balance centered on the sale of protection products continues," adding, "While improving the K-ICS ratio is necessary for stable dividends, it is expected to recover to the 180% range in the second half considering new subordinated bond issuance. The high dividend attractiveness will continue."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
