Auto insurance offsets pressure on long-term earnings
Hanwha said Samsung Fire & Marine had the lowest volatility among financial companies despite weak asset markets. Analyst Kim Do-ha noted that the insurer recorded trading and valuation losses but still delivered the most stable earnings among insurers. He also viewed the improving profitability of its long-term and auto insurance businesses favorably.
Third-quarter consolidated net income attributable to controlling shareholders declined 8% from a year earlier to 493.2 billion won. That was slightly below the market consensus but in line with Hanwha's forecast. Higher indirect operating expenses pushed long-term insurance earnings below expectations, while auto insurance profitability exceeded expectations and offset that shortfall.
The quarterly figures showed insurance profit rising 6.9% to 396 billion won as investment profit dropped 23.1% to 255 billion won. Auto insurance earned 19.1 billion won, reversing a loss of 64.8 billion won in the third quarter of 2025.
Kim said Hanwha had made little change to its earnings forecasts. Instead, the recent fall in the stock price had opened up enough upside to warrant the upgrade.
Nine-month profit and capital position
For January through September 2026, Samsung Fire & Marine reported net profit attributable to controlling shareholders of 1.8655 trillion won, a 4.6% increase from a year earlier. Insurance profit grew 9.8% to 1.5103 trillion won, while investment profit increased 6.7% to 1.0434 trillion won. Pre-tax profit for the period totaled 2.503 trillion won.
At the end of September, its contractual service margin, a measure of future insurance earnings, was 14.84 trillion won. That represented an increase of 667 billion won from December 2025. Its K-ICS solvency ratio stood at 280.8%.
Canopius acquisition to expand overseas earnings
Samsung Fire & Marine's board approved a plan on Nov. 9 to buy the remaining 60% of UK Lloyd's-based specialty insurer Canopius alongside global private equity firm KKR and Korea Investment Corporation (KIC). The transaction would increase Samsung Fire & Marine's ownership from 40% to 80.6%; KKR would hold 12.1% and KIC 7.3%.
The insurer expects to complete the purchase by the end of March 2027 and plans to use internal funds, with no external borrowing. It estimates that the acquisition will add about 1 to 2 percentage points to return on equity and increase the overseas contribution to profit from less than 10% to the mid-20% range after consolidation.
The company's projections put Canopius's pre-tax profit at about 750 billion won in 2028, when it is fully consolidated. In 2025, Canopius contributed 113.9 billion won in equity-method income.
Samsung Fire & Marine expects the transaction to reduce its K-ICS ratio by about 20 to 25 percentage points and its core K-ICS ratio by 15 to 20 percentage points. Even after those declines, the company expects K-ICS to remain above its medium- to long-term target of 220%.
Dividend plans unchanged, further policy under review
Kim's remaining concern was shareholder returns. He said the prospect of sizable dividends was the stock's main investment attraction, making the delay in setting out a clear policy disappointing.
Samsung Fire & Marine said its existing shareholder return plans remain unchanged for now. Those include a 50% dividend payout target and a share cancellation scheduled for 2028. Its value-up targets also call for sustainable return on equity of 11% to 13% and a shareholder return ratio of 50% by 2028.
Management said it was still reviewing the next phase of its medium- to long-term capital plan and provided no timetable for an upgraded value-up plan.
