DB Insurance's stock price recently hit its lowest point in six months. This is attributed to concerns that it may have to pay out large insurance claims due to wildfires in Los Angeles, California. Hanwha Investment & Securities estimated the loss for DB Insurance at 100 billion won.
DB Insurance shares closed at 91,700 won on the KOSPI market on the 14th. The stock price fell by 8.12% (8,100 won) from the previous day. This is the lowest stock price since the so-called 'Black Monday' in August of last year.
This is attributed to the impact of the LA wildfires. As of the 13th (local time), 24 people have died and 23 are missing, with wildfires persisting for a week. More than 180,000 people are currently evacuated, and over 12,000 buildings have been damaged. The affected area is more than one-third of Seoul.
Kim Do-ha, a researcher at Hanwha Investment & Securities, noted that DB Insurance has the largest exposure among domestic insurers. Considering that DB Insurance recognized losses of about 180 billion won due to natural disasters in Hawaii and Guam in the second half of 2023, he estimated that losses in the low 100 billion won range would occur due to this wildfire.
Research Institute Kim said, “It would have a very large error range to speculate on the loss amount as we have not even received claims yet and the disaster has not concluded. However, given that the reinsurance coverage limit is around 50 billion won, and the loss size is expected to exceed this, we should consider raising the upper limit for the loss amount.”
Research Institute Kim reflected the loss amount of 100 billion won and lowered the target stock price of DB Insurance from 136,000 won to 129,000 won by about 5%. However, Research Institute Kim stated, “It is difficult to estimate the loss amount, but the decline of more than 8% in DB Insurance's stock price is considered excessive,” adding, “The drop in stock price is greater than that of U.S. insurers with larger local exposure.”