DB Insurance targets 50% shareholder return ratio by 2030

DB Insurance announced Saturday that it will expand its shareholder return ratio target to 40% on a consolidated basis and 50% on a standalone basis by 2030.

According to the company's disclosure, the new standalone target represents a 15-percentage-point increase from the 35% goal DB Insurance had previously set for 2028. However, treasury share cancellations are not included in the calculation. The company also plans to raise its dividend per share by at least 10% annually.

DB Insurance said a growth strategy focused on expanding new contracts to build up the contractual service margin tends to drive up operating costs and worsen policy retention rates, which could ultimately reduce distributable profit over the medium to long term.

In response, the company set a Korea Insurance Capital Standard ratio of 150–220% as the target range within which it will pursue steady dividend expansion.

To manage its shareholder return targets, DB Insurance also introduced a new DCR metric — distributable profit divided by projected dividends — with a management range of 100–400%.

If both the K-ICS ratio exceeds 220% and the DCR exceeds 400% simultaneously, the company said it will consider additional shareholder returns. If either the K-ICS ratio falls below 150% or the DCR falls below 100%, it will consider adjusting shareholder returns.

The company plans to set a K-ICS ratio of 180% and a DCR of 200% as reference benchmarks for proactive management of capital soundness and distributable profit.

Alongside this, DB Insurance will adopt return on equity as a key capital efficiency indicator, with a policy of maintaining a spread of at least 2 percentage points above its cost of equity.

To manage its insurance and asset management operations, the company will maintain a risk-to-capital ratio — K-ICS available capital divided by K-ICS required capital — at 200% or above, and will use return on investment as the management benchmark for new business investment.

At an IR held Saturday, Jeong Byeong-rok, head of the accounting division, said in connection with the planned overhaul of the surrender reserve system: "We believe it would be difficult to reach a conclusion that weakens policyholder protection, even with system reforms. We have drawn up a corporate value enhancement plan that can simultaneously achieve expanded shareholder returns under the current system."

DB Insurance also aims to drive a valuation re-rating by deepening synergies with Fortegra, the US specialty insurer it recently finished acquiring. The company completed its purchase of a 100% stake in Fortegra, paying $1.65 billion to US-based Tiptree and global private equity fund Warburg Pincus. The deal marks the first time a domestic insurer has acquired an entire US-based insurance company outright, and the largest overseas merger and acquisition in the history of Korea's insurance industry.