Company Reports

We will discontinue analyst coverage of Samsung Life on or about Feb. 7. We provide analyst research and ratings on over 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

We retain our fair value estimate of KRW 77,000 for Samsung Life Insurance, or 0.3 times book value and 8 times our earnings forecast for 2023. We continue to view Samsung Life as a lackluster investment due to its chronically low return on equity (average of only 5% since its IPO in 2010), but see it as undervalued even relative to the company’s poor returns. We think better visibility into future dividend increases could be a catalyst for revaluation, but third-quarter earnings—the third time Samsung Life has reported under new IFRS 17 accounting—did not provide any news here. Our forecast remains for dividend of KRW 3,300 per share for 2023 (2022: KRW 3,000), increasing by KRW 200 annually thereafter.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%, compared with around 12% each for Kyobo and Hanwha Life. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and accounts for around 20% of Samsung Life’s annualized premiums equivalent at present, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%, compared with around 12% each for Kyobo and Hanwha Life. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and accounts for around 20% of Samsung Life’s annualized premiums equivalent at present, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

We retain our fair value estimate of KRW 77,000 for Samsung Life Insurance, equivalent to 0.32 times book value as of June 2023 and 9.1 times our earnings forecast for 2023. We continue to view Samsung Life as a relatively lackluster investment due to its chronically low return on equity (average of only 5% since its IPO in 2010), but see the shares as undervalued at their current price of 0.29 times book value. We think better visibility into future dividend increases could be a catalyst for revaluation, but 2023 interim earnings—the second quarter Samsung Life has reported under new IFRS 17 accounting—did not provide any news here. Our forecast remains for dividends of KRW 3,300 per share for 2023 (2022: KRW 3,000), increasing by KRW 200 annually thereafter.

We raise our fair value estimate for Samsung Life Insurance slightly to KRW 77,000 from KRW 76,000. Our new fair value estimate is equivalent to 0.35 times book value as of March 2023 and 9.1 times our earnings forecast for 2023. It represents 16% upside from the current share price. We continue to view Samsung Life as a relatively lackluster investment due to its chronically low return on equity (average of only 5% since its IPO in 2010), but see the shares as undervalued at their current price of 0.30 times book value. We think better visibility into future dividend increases could be a catalyst for revaluation, but first-quarter earnings—the first quarter Samsung Life has reported under new IFRS 17 accounting—did not provide any news on the dividend visibility front. Our forecast remains for dividends of KRW 3,300 per share for 2023 (up from KRW 3,000 for 2022), increasing by KRW 200 annually thereafter.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%, compared with around 12% each for Kyobo and Hanwha Life. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and accounts for around 20% of Samsung Life’s annualized premiums equivalent at present, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

We raise our fair value estimate for Samsung Life Insurance slightly to KRW 76,000 from KRW 75,000 as we incorporate its disclosures on 8 March showing how new accounting standards affected its 2022 income statement and year-end balance sheet. Our forecasts are now based on the new accounting, though we still don't have a complete picture of all the final effects. The main effect is a slight boost to bottom-line reported earnings, an increase in balance sheet equity, and higher confidence in the outlook for steady dividend growth as earnings predictability should increase.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and accounts for around 20% of Samsung Life’s annualized premiums equivalent at present, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

We maintain our fair value estimate of KRW 75,000 for Samsung Life Insurance. We expect its return on equity, or ROE, to stay below 4% over our forecast horizon and assign a capital allocation rating of Poor based on its very large holdings of Samsung Electronics shares (an imprudent concentration in a single name), but even considering such negatives we see the shares as moderately undervalued at their current price, at only 0.26 times embedded value as of the end of 2021.

We maintain our fair value estimate of KRW 75,000 for Samsung Life Insurance. We expect its ROE to stay below 4% over our forecast horizon and assign a capital allocation rating of Poor based on its very large holdings of Samsung Electronics shares (an imprudent concentration in a single name), but even considering such negatives we see the shares as undervalued at their current price, at only 0.24 times embedded value as of the end of 2021.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and now accounts for around 20% of Samsung Life’s annualized premiums equivalent, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

We maintain our fair value estimate of KRW 75,000 for Samsung Life Insurance, equivalent to 0.29 times embedded value at the end of 2021 and 15% above the current share price. First-quarter net profit of KRW 270 billion, representing annualized ROE of 3.0% and return on embedded value of 2.6%, was in line with our expectations and we leave our earnings forecasts unchanged. We continue to think that Samsung Life’s valuation below 0.3 times embedded value is very inexpensive, but such cheap valuation is mostly justified given our forecast for ROE to average below 4% over the next five years.

We maintain our fair value estimate of KRW 75,000 for Samsung Life Insurance as we roll our model forward by a year following fourth-quarter results. Our fair value estimate is equivalent to 0.29 times year-end embedded value of KRW 45.8 trillion (up 5% from KRW 43.6 trillion at end-2020), a multiple we see as fair given our expectation of an average return on embedded value, or RoEV, of 3.0% over the next five years. It represents 21% upside from Tuesday’s closing price.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and now accounts for around 20% of Samsung Life’s annualized premiums equivalent, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and now accounts for around 20% of Samsung Life’s annualized premiums equivalent, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

We maintain our no-moat rating on Samsung Life Insurance and our fair value estimate of KRW 75,000, 14% above today’s closing price. Our fair value estimate is 0.31 times embedded value at the end of 2020 and 0.29 times our estimate of 2021 embedded value.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and now accounts for around 20% of Samsung Life’s annualized premiums equivalent, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.

We maintain our no-moat rating on Samsung Life Insurance and fair value estimate of KRW 75,000, equivalent to 0.31 times embedded value and 2% below Friday’s closing share price.

Samsung Life is the largest of Korea’s Big Three traditional life insurers, with a market share of premiums of more than 22%. Its main sales channel are more than 20,000 financial consultants, most of whom are female, who give customized consultations to potential customers at their workplaces or homes, with various products tailored to different age groups and their savings and protection needs. Bancassurance has been growing as a sales channel since its initial legalization in Korea in 2003 and now accounts for around 20% of Samsung Life’s annualized premiums equivalent, a larger portion than for some other large traditional companies but still limited compared with some smaller rivals exclusively focused on the bank channel.