[Click e-Stock] "DB Insurance, Somewhat Disappointing Value Enhancement Plan"

On April 22, Korea Investment & Securities maintained its "Buy" investment rating on DB Insurance and set a target price of 115,000 won.

Hong Yeran, a researcher at Korea Investment & Securities, gave high marks to DB Insurance's profitability.

She explained, "DB Insurance has maintained its 13th-month persistency rate at around 90% each quarter, even in a competitive new contract environment. Despite the conservative revision of the lapse rate assumption for non-surrender and low-surrender products in the fourth quarter of 2024, the CSM multiple actually rose to 18.4 times, which demonstrates the company's strong profit-generating capability."

She added, "However, due to the cumulative effect of reductions in auto insurance premiums, the auto insurance segment is expected to record a loss of 6.8 billion won in 2025."

DB Insurance is also expected to continue managing its capital ratio in a stable manner. Hong noted, "As of the end of 2024, the K-ICS ratio is 203.1%. The impact of the introduction of regulatory measures such as the scheduled final observation maturity through 2027 is expected to decrease the K-ICS ratio by around 5% each year. Nevertheless, even taking this into account, the capital ratio is projected to remain above 200%."

However, she expressed some disappointment regarding the value enhancement plan announced in February.

Hong explained, "The core of the plan is to increase the shareholder return ratio to 35% by 2028, and to set the minimum and maximum K-ICS ratio targets at 200% and 220%, respectively. Given that the current PBR is below 1, which makes share buybacks and cancellations particularly effective, it is disappointing that these measures were not included in the plan."