NH Investment & Securities announced on August 18 that it has raised its target price for Hyundai Marine & Fire Insurance from 46,000 won to 55,000 won, citing improvements in both insurance and investment profits, as well as a positive shift in the asset-liability duration gap. The firm maintained its 'buy' rating.
Jung Jun-seop, a researcher at NH Investment & Securities, stated, "Hyundai Marine & Fire Insurance is showing an upward trend in both insurance and investment profits," adding that the duration gap turned positive at 0.7 years in the second quarter.
He noted that the company's net profit for the second quarter reached 391.8 billion won, a 58.2% increase compared to the same period last year. Even excluding a one-time factor of 90 billion won from the reversal of loss contract costs due to changes in actuarial assumptions, the results remain strong.
Additionally, Jung mentioned that the combined ratio for auto insurance fell below 100% in the second quarter, and investment profits were solid at 99.7 billion won, with the negative impact of actual loss ratios significantly reduced.
The possibility of resuming dividends was also viewed positively. Jung stated, "Thanks to rising interest rates, strong profits, and effective reserve management, the distributable profit has improved to around -660 billion won. While market conditions and regulatory improvements need to be considered, we expect dividends to resume in 2027."
He further projected that the effects of the management benefits and the implementation of the eight-week rule for future treatment costs will begin to show in the second half of the year, estimating an additional improvement in loss amounts of 150 billion to 200 billion won annually, provided the balloon effect is not significant.
* This article has been translated by AI.
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