The creator is an analyst of NH Funding & Securities. He may be reached at firstname.lastname@example.org. — Ed.
Among the many three main home non-life insurers, DB Insurance coverage boasts the bottom 2022E P/E and highest 2022E DY.
Elevate TP to W88,000
We elevate our TP on DB Insurance coverage from W86,000 to W88,000 in reflection of earnings enhance stemming from wholesome loss ratios for long-term danger and auto insurance coverage. We calculate our new TP by making use of a goal P/B of 0.96x to 2022E BPS of W91,136.
Enterprise surroundings must be clean in 2H22
Lengthy-term danger loss ratio, which led the stable earnings of 1H22, ought to stay wholesome in 2H22. Over-treatment centered on cataracts has decreased quickly since April. As well as, auto insurance coverage can be displaying loss ratio enchancment even within the absence of Covid-19 results, because of regulation enchancment and strengthened underwriting.
Impacts of Korea’s current heavy rains ought to stay underneath management, because the agency’s associated burden is restricted underneath extra of loss (XoL) protection (W7bn). Industrial insurance-related claims also needs to be minimal.
2Q22 NP of W283bn, +20.1% y-y
DB Insurance coverage logged 2Q22 NP of W283bn (+20.1% y-y), exceeding consensus by 16.5%. Lengthy-term danger loss ratio arrived at 87.8% (-6.6percentp y-y, -1.4percentp q-q), displaying sharp enchancment on decreased cataract-related claims, and auto loss ratio got here in at 74.8% (-1.4% y-y), remaining at a low stage.
For 2022, DPS ought to attain W4,100 (payout ratio: 27.5%) and DY ought to high 6.5%, the strongest among the many big-3 non-life insurers. As the corporate’s 2022E P/E is the bottom among the many big-3 non-life insurers whereas its DY is the very best, a stable share worth development is predicted.