[Click eStock] "Samsung Life Insurance, a feast that was only full of rumors"

On the 21st, Daishin Securities pointed out that Samsung Life Insurance's poor performance and insufficient shareholder return plans were concerning. However, they maintained their investment opinion as 'Buy' and the target price at 125,000 KRW.

Analyst Park Hyejin commented on Samsung Life Insurance, saying, "The disappointing Q4 performance inevitably led to a disappointing dividend per share (DPS) of 4,500 KRW. Despite the implementation of the Capital Markets Act amendment, there was no mention of timing or methods related to treasury stock cancellation or value-up initiatives, only a repeated target of a 50% dividend payout ratio within 3 to 4 years." She added, "The current stock price already reflects significant expectations for shareholder returns, so we hope the company will meet market expectations soon through a prompt value-up announcement."

Samsung Life Insurance announced on the 19th that its consolidated net profit for last year reached 2.2603 trillion KRW, marking an all-time high. This figure represents an 11.1% increase compared to the previous year.

However, more than half of this profit came from investment gains, while insurance profits significantly declined. In particular, the Q4 net profit turned to a loss of -645.1 billion KRW, recording an earnings shock that fell far below Daishin Securities' estimates and consensus. This was due to loss burden costs related to non-dividend pension contracts, incurred accident liabilities, and increased operating expenses.

Non-dividend pension insurance is expected to remain a continuous burden. Last year, about 300 billion KRW in loss burden contract costs arose due to non-dividend pension insurance. This product returns a portion of the profits earned from the company's investments in stocks and bonds to policyholders regularly. Although sales were discontinued in the 2000s, the increasing life expectancy of remaining policyholders has led to a rise in insurance payouts. The company also explained during the conference call on the 20th that "loss burden contract costs are expected to continue at around 200 to 300 billion KRW annually."