DB Insurance Co. Ltd.

Loans or securities with alternative-investment features accounted for about 47% of DBI's invested assets as of end-June 2023. While these could increase investment volatility, the insurer's adequate credit risk control should mitigate a possible adverse impact, in our view. That said, DBL's efforts to focus on protection-type policies with higher margins than savings-type policies, and its small size relative to the property and casualty (P/C) insurance business, temper potential capital pressure on the parent, in our view. The stable outlook reflects our view that DBI will maintain its very strong competitive position in Korea's insurance market and satisfactory capitalization over the next 18-24 months. We believe DBI's prudent underwriting philosophy, shift toward protection products, and investment strategy that focuses on

...We expect DB Insurance Co. Ltd.'s (DBI) profitability to improve modestly during the next two years. Ongoing rate hikes for unprofitable medical indemnity policies and tightened claims management will underpin this. This is despite a slight deterioration in the insurer's auto loss ratio amid premium cuts, in our view. Higher interest rates will also gradually support investment returns. Moderate business growth prospects and broadly stable investment asset allocation will likely underpin DBI's capitalization. We estimate the insurer's premiums will grow about 6% annually over the next two years. It has been focusing on high-margin, protection-type insurance policies. This is amid the implementation of International Financial Reporting Standards (IFRS) 17 and 9, as well as the new regulatory solvency framework, Korean-Insurance Capital Standard (K-ICS), from January 2023. Loans or securities with alternative-investment features accounted for about 47% of DBI's invested assets as of end-June...

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