Korea Insurance: Regulatory risks easing, recovery cycle intact
- Entering into 2H, non-life insurance shares are outperforming others, buoyed by expectations for the upcoming changes
to the national health insurance system. The change is positive in the short term as it helps improve loss ratios but neutral
in the longer term.
- Concerns over RBC ratios are dissipating on regulatory changes that include a revision of the liability adequacy test (LAT).
Successful capital raising in 2Q through CoCo bonds and subordinated bonds will help insurers meet their capital needs.
- Non-life insurers will be able to overcome reduced auto premiums with improved long-term loss ratios. Of note, longterm
insurances are more sensitive to a 1% change in the loss ratio than auto insurances.
- Life insurers are relatively less sensitive to the change in the national health insurance system or the pressure to lower
premiums. Their underwriting profits are growing steadily and earnings momentum remains strong on rising investment
profits and declining liabilities reserve provisions amid interest rate hikes.
Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc.
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