Samsung F&M: Clear enterprise setting enchancment

The creator is an analyst with NH Funding & Securities. He could be contacted at — Ed.

Samsung F&M reported good 2Q22 earnings. If the agency chooses to extend its dividend coverage, it is going to be the icing on the cake.

2H22 . Enterprise setting and earnings will enhance in

Samsung F&M’s sturdy enterprise setting and enchancment in internet earnings of non-life insurers had been reaffirmed with 2Q22 earnings. Within the auto insurance coverage enterprise, the loss ratio remained sturdy on account of elevated laws and stronger underwriting. Amid inflation lately, strain was constructing for a discount within the premium price, which ought to ease a few of the associated issues after the latest heavy rains.

The long-term danger loss ratio additionally continued to enhance. Over-treatment centered on glaucoma has decreased sharply since 2Q22. Assuming there aren’t any additional issues with 2H22, the loss ratio is anticipated to be high-quality.

The influence of the latest heavy rains ought to be restricted. As of 7am on August 11, complete claims for auto insurance coverage had been W51.1bn. Nonetheless, the publicity of the agency is proscribed below Exceeding Loss Protection (W14.5bn). Business insurance coverage claims are additionally reported to be below W10bn as of 4 p.m. on August 10.

2Q22 NP of W341bn (+9% yrs)

The corporate reported 2Q22 NP of W341bn, beating the consensus by 5.7%. The long-term danger loss ratio improved sharply to 84.5% (-4.9% p yy, -3.6% p qq) and the auto loss ratio remained secure at 78.5% (+0.3% yy).

We estimate a 2022E NP of W1,168bn (+6.9% yy). The DPS is conservatively estimated at W12,000 (payout ratio: 43.7%; 2022E DY: 5.9%). Nonetheless, we imagine that there’s nonetheless scope for growth of DPS based mostly on the dedication of the administration and modifications within the exterior/inner setting.

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