Hanwha Investment & Securities said on the 18th that Korean Reinsurance Company logged a record-high net profit thanks to the absence of large-loss events and strong equity investment performance. It raised its investment rating to Buy and lifted the target price to 19,000 won from 12,500 won. Korean Reinsurance Company's previous day's closing price was 13,130 won.
Korean Reinsurance Company posted first-quarter net profit of 209.5 billion won, up 131% from a year earlier. Insurance profit came to 177.7 billion won, an increase of 152% from a year earlier.
Kim Do-ha, an analyst at Hanwha Investment & Securities, said, "Without special factors, the company recorded an all-time high net profit," adding, "In the same period a year earlier, there were large-loss events such as the Myanmar earthquake overseas and the LA wildfires that amounted to 85 billion won, and 25 billion won from the Yeongnam wildfires in Korea, but this year there were no notable large-loss events."
Korean Reinsurance Company has shown a trend for years in which insurance revenue decreased and the combined ratio improved in tandem due to profitability-focused portfolio adjustments. However, from next year, volume is expected to expand based on improved profitability and an upgraded credit rating.
First-quarter investment profit rose 136% from a year earlier to 106.7 billion won. Recurring investment profit excluding currency effects increased 96% to 100.8 billion won. In particular, equity management performance was strong, reaching a level comparable to the full year a year earlier.
Kim said, "Korean Reinsurance Company canceled all of its treasury shares (9.3%) held at the end of the first quarter and disclosed plans to continue meeting the criteria for high-dividend companies," adding, "Accordingly, we raised our dividend per share (DPS) estimate to increase 10% each year, and the average dividend yield over the next three years is expected to be 5.3%."