Korea Insurance 2Q26e preview: both insurance profit and investment profit are strong

研报英文原文证据摘录

Korea Insurance 2Q26e preview: both insurance profit and investment profit are strong

ion losses amid heightened geopolitical risk and weaker capital market

performance. For 2Q26e, we expect bond valuation losses to ease vs 1Q26 and capital

market gains to improve, supported by robust KOSPI performance.

Regulatory reform in July to further support risk loss ratios: From July,

regulators will include manual therapy in managed care under national coverage

(Exhibit 5). Under managed care, both utilisation and pricing are capped at 15

sessions per year and KRW44,000 per session. We expect this reform to improve

medical indemnity risk loss ratios by reducing moral hazard and excessive claims.

Growing demand for TSR is inevitable: Unlike banks, insurers have yet to deliver

shareholder returns that investors view as consistently satisfactory. With rising

expectations for capital return and shareholder-friendly actions, we expect DBI to

announce a value-up plan in September after its 2Q26 results. The timing reflects

a delay related to the consolidation of Fortegra’s financial statements, which is now

expected to be disclosed in August. Following DBI’s value-up plan, we expect SFM

and SL to follow with value-up initiatives in the early part of next year.

Reiterate Buys on SFM, SL, DBI and HMF; Hold HL: We maintain a positive view on

Korean insurers on improving expectations for value-up initiatives and stabilising loss

ratios. We see P&C insurers as the key beneficiaries of the regulatory reform. We raise

our TPs for SFM to KRW800k (from KRW682k), DBI to KRW222k (from KRW219k),

and HMF to KRW47k (from KRW45k). SFM’s TP increase also reflects higher total

equity/BVPS, driven by the mark-to-market OCI gains from its 1.5% stake in Samsung