Value context and insight. lkm@koreatimes.co.kr
SGI to increase ROE to 10% by 2030 to bolster shareholder returns
Seoul Guarantee Insurance (SGI) headquarters in Jongno District, Seoul. Courtesy of SGI
By Lee Kyung-min
Seoul Guarantee Insurance (SGI) aims to achieve a return on equity (ROE) ratio of 10 percent by 2030, as part of a comprehensive long-term strategy to enhance corporate value, increase shareholder returns and strengthen its core business competitiveness, the company said Wednesday.
The guarantee service provider will also maintain a capital adequacy ratio or Korean Insurance Capital Standard (K-ICS) ratio of over 320 percent by 2030.
The ratio is a measure of financial soundness for Korean insurance companies, calculated by dividing their available capital by the required capital to meet potential claims. A higher ratio indicates stronger financial health. The recommended minimum is 130 percent.
SGI said the market-friendly shareholder return drive is expected to strengthen investor confidence in the firm, together with plans to boost profitability in its guarantee and credit insurance businesses, as well as enhance investor communications.
The firm reiterated its commitment to returning a total of 200 billion won ($142 million) every year from this year through 2027 in the form of cash dividends and share buybacks for cancellations.
Its shareholder-friendly policy will also include a per-share minimum dividend payout of 2,865 won for this year.
Also in store are plans to introduce quarterly dividend payouts, as well as to set a clear shareholder return ratio target to be decided under the recently revised Commercial Act.
The company will upgrade its asset management strategy to strengthen capabilities in the guarantee and credit insurance businesses, while continuing to pursue new growth drivers to accelerate business expansion.
SGI will also enhance its investor relations efforts, including collecting feedback from investors via multiple communication channels, in a move to build strong investor confidence.
“This corporate value enhancement plan will help us strengthen shareholder-friendly policies, improve profitability, enhance capital efficiency and maintain financial soundness,” the firm said.