DB Insurance (005830) plans to raise its consolidated shareholder return ratio to 40% by 2030 and increase its dividend per share by more than 10% each year. The insurer said it will strengthen shareholder returns by managing distributable profit and capital soundness in tandem, while developing Fortegra, the U.S. specialty insurer it acquired in May, into a new growth engine.
DB Insurance disclosed the medium- to long-term corporate value enhancement plan on the 28th and held a briefing for shareholders, analysts and investors.
The plan centers on expanding shareholder returns through what the company calls sustainable balanced growth, which prioritizes raising distributable profit and capital efficiency together over short-term expansion of business volume. Under the plan, DB Insurance is lifting its shareholder return target from the previous 35% on a separate basis for 2028 to 40% on a consolidated basis and 50% on a separate basis by 2030. The company will also raise its dividend per share by more than 10% annually to improve the predictability of shareholder returns. Last year, DB Insurance posted a dividend payout ratio of 30.0% on a separate basis and a total shareholder return of 34.9%.
To manage the capital burden from larger dividends, the company is introducing the dividend coverage ratio, or DCR, calculated by dividing distributable profit by expected dividends, as a new management indicator. It will meet its shareholder return targets while keeping its Korean Insurance Capital Standard, or K-ICS, ratio between 150% and 220% and its DCR between 100% and 400%. The company set a K-ICS ratio of 180% and a DCR of 200% as safety thresholds, and said it will manage both preemptively so that neither falls below those levels even if market conditions such as interest rates and loss ratios deteriorate.
If capital capacity substantially exceeds target levels, the company will pursue additional shareholder returns. It will review its capacity for further returns if return on equity falls below its cost of equity, or if the K-ICS ratio exceeds 220% and the DCR exceeds 400% at the same time. DB Insurance will use ROE as a core management indicator, aiming to keep it stably at least 2 percentage points above its cost of equity.
In its core insurance business, the company is putting greater weight on profitability and capital efficiency than on short-term expansion of business volume. It will improve policy retention rates and lower loss ratios by raising efficiency across the entire process, from product design and underwriting to policy maintenance and claims payment. The company will also adjust the size of new contracts and its product portfolio based on medium- to long-term cash flow and projections for distributable profit.
Fortegra, whose acquisition was completed in May, will be developed into a global growth pillar. Centered on specialty insurance, Fortegra has grown revenue at an average annual rate of 14.7% over the past five years while keeping its combined ratio at around 90%. DB Insurance plans to expand its U.S. and European operations and build a global portfolio through synergies with Fortegra.
"Shareholder value should not be a residual left over as a result of management, but the starting point for decisions on growth and capital allocation," said Nam Seung-hyung, chief financial officer of DB Insurance. "We will carry out this plan through sustainable performance rather than short-term expansion of business volume."
