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【出版时间及名称】：2010年4月韩国保险行业研究报告
【作者】：汇丰银行
【文件格式】：pdf
【页数】：140
【目录或简介】：
Investment summary 1
Risk Based Capital: not that conservative 9
Insurers will adopt a uniquely Korean version of Risk Based Capital (RBC) which will continue to flatter their solvency. A
truer application of a RBC framework would see excess capital (>100%) fall from KRW12trn under Korean RBC to
KRW7trn. Samsung F&M is the best capitalised group on all solvency definitions; life insurers appear the weakest under more
conservative RBC framework, which is in stark contrast to that implied by Korea RBC
Capital market sensitivity 15
Historically, Korean insurers’ share prices have been positively correlated with higher interest rates and equity markets. The
ROEs of the non-life insurers, LIG and Hyundai, are the biggest beneficiaries of rising interest rates. The valuations of
Dongbu, Samsung F&M and LIG are the most geared to rising equity markets.
Valuation methodology 25
We have rebuilt all models and rolled out five separate valuation methodologies to assess the fundamental value of each
insurer. Our price targets reflect a weighted average of pertinent valuation methodologies coupled with company-specific
discounts which reflect solvency, disclosure and guarantee concerns. With the exception of Korea, embedded value is a key
valuation metric in Asian markets.
Ex-growth? 33
Korea’s insurance market offers attractive growth despite superficially high insurance penetration rates. We see specific
premium growth opportunities in the healthcare, individual annuities and corporate retirement space.
Intensifying competition 43
We expect that competition will intensify in the Korean insurance sector. Competitive pressures will come from potential
issuance of new licences, expansion of Nonghyup, direct distribution, development of insurance marketing companies and the
introduction of a cash flow pricing model.
Non-life overview 46
The Korean non-life market has a relatively low penetration if we adjust for the fact that 60% of premiums are long-term.
While general insurance is more profitable than auto and long-term lines, premium growth has been lacklustre as corporates
choose to retain much insurance risk on their balance sheets. We expect auto insurance profitability to gradually recover from
sub-optimal levels over the next 12 months should much needed premium rate hikes materialise post June regional elections.
Life market overview 57
The Korean life insurance industry has a chequered past culminating in widespread restructuring in 1998. The Korean life
industry is showing its public face again with a spate of IPOs. We accept the consensus view that the life insurers have superior
growth prospects to non-life peers, however, life is burdened with problematic ‘high fixed interest’ guarantees and
questionable solvency under a more conservative application of the RBC model.
Investment propositions 67
Disclosure appendix 133
Disclaimer 136
Six reasons to be positive
1) Valuation anomaly in the spotlight
Traditionally the Korean non-life companies have
been valued on a price to book value basis. While
that valuation methodology is valid for a pure nonlife
company writing short tail business, the bulk of
business written by the Korean non-life companies
and their major source of earnings is long-term
business, typically 60% of non-life premiums.
The Korean life companies have now begun to list
– Tong Yang Life in October 2009, Korea Life in
March 2010 and Samsung Life has announced its
intention to list in May 2010. The market has
attributed valuations to Tong Yang and Korea
Life using the same GAAP based metrics. This is
understandable but wrong, in our view, as such a
valuation does not take into account the
underlying value creation of long-term business.
In other markets in Asia and Europe the valuation
approach is based on appraisal value – embedded
value plus a franchise value that reflects the
perceived ability of the company to sell profitable
life or long-term business in the future.
That said, the Korean insurers offer value on
conventional ‘price to adjusted book value’
methodology; the sector is trading on 1.2x our
2010e book value estimate which implies a 12%
ROE versus our 14% average three-year forecast.
Investment summary
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