Sangsangin Investment & Securities raised its target price for Samsung Fire & Marine Insurance to 800,000 won from 600,000 won, saying investor attention should focus on expanded shareholder returns rather than short-term earnings volatility. It maintained a Buy rating. Samsung Fire & Marine Insurance closed the previous trading day at 700,000 won.
Kim Hyun-su, an analyst at Sangsangin Investment & Securities, expected the possibility of increased volatility in the second-quarter results due to changes in actuarial assumptions. The explanation is that as the insurer reflects future loss ratios and expenses more conservatively, the amortization gain of the contractual service margin (CSM) could partially decline.
However, the core business profitability was assessed as unlikely to be significantly damaged. Kim said, "As new-guarantee loss ratios, loss ratios for renewable policies, and expense assumptions are reflected more conservatively, CSM amortization gains could edge down," but added, "As in the first quarter, no major loss factors have yet been observed in general insurance, and auto insurance is expected to show a similar trend."
Kim added, "The key variable for second-quarter results is likely to be the extent to which changes in actuarial assumptions are reflected, but downside in the core business profit and loss should be limited."
In the second half, improvements to the insurance system are expected to help defend earnings. The analysis is that as the eight-week rule for general patients and the inclusion of manual therapy in a managed reimbursement system are reflected, insurance profit and loss could gradually improve.
Non-insurance earnings contributions were also cited as a positive factor. Kim said, "Equity-method gains from Canopius are expected to be about 220 billion won annually, and dividend income from Samsung Electronics is expected to be about 33 billion won per quarter," adding, "Consolidated controlling net income in 2026 is expected to rise 10.3% year over year to 2.2 trillion won."
The shareholder return policy is also drawing attention. Samsung Fire & Marine Insurance has set a goal of achieving a 50% shareholder return ratio by 2028. Kim said, "Assuming a step-up, this year's dividend per share (DPS) is expected to increase about 23% from a year earlier to 24,000 won."
Kim said, "Short-term earnings volatility stemming from changes in actuarial assumptions is inevitable, but considering the industry's top-tier capital strength, the value of Samsung Electronics equity, and the visibility of expanded shareholder returns, the premium within the non-life insurance sector should be maintained."