Align Partners Capital Management Inc. has stepped up its engagement with DB Insurance Co., Ltd., issuing a public letter to the board and filing shareholder proposals for the 2026 annual general meeting (AGM) as it seeks changes to capital policy, intra‑group transactions, and governance at the South Korean non‑life insurer. Align Partners, an investment firm focused on Korea that holds about 1.9% of DB Insurance, said it is aiming to address what it sees as structural factors behind the company’s discounted valuation, despite its reported earnings and solvency metrics.
In its letter, Align Partners said DB Insurance recorded a return on equity of 16.1% for the 12 months to the third quarter of 2025 and 17.8% for full‑year 2025, ranking second in the domestic non‑life sector by net income. Even so, the firm noted that DB Insurance’s shares trade at a price‑earnings multiple of 5.4 times, compared with about 10.6 times for selected Korean peers, including Meritz Financial and Samsung Fire, and roughly 14.1 times for a group of global insurers. Align Partners also referred to the insurer’s adjusted price‑to‑book ratio of 0.40 times based on comprehensive equity under IFRS 17, including contractual service margin. On that basis, the firm said the stock is trading at about a 60% discount to its IFRS 17‑equivalent embedded value.
The shareholder linked part of this gap to the company’s return on required capital of 21.2%, which it said trails Samsung Fire, Meritz, and a set of overseas insurers. The letter argued that DB Insurance has historically emphasized market share and premium volume over risk‑adjusted profitability, even though it reported a K‑ICS solvency ratio of 226% as of the third quarter of 2025, above the 130% regulatory threshold. On distributions, Align Partners cited a 2024 payout ratio of 22.1% and said this is below averages it tracks for domestic and international peers. It contrasted DB Insurance’s current 35% payout target on a standalone basis with 50% payout commitments announced by some other Korean insurers by 2028.
The letter sets out concerns around related‑party transactions within DB Group and their potential impact on minority shareholders. Align Partners noted that controlling shareholders and related parties collectively own 47.8% of DB Inc., compared with around 20.9% of DB Insurance, excluding the DB Kim Jun Ki Cultural Foundation’s 5.1% holding in the insurer. In the firm’s view, this ownership pattern creates incentives to shift value from DB Insurance to DB Inc.
Between 2018 and the third quarter of 2025, DB Insurance and its financial affiliates paid about KRW 602 billion to DB Inc. and IT subsidiary DB FIS through intra‑group arrangements, excluding brand royalties, according to figures cited in the letter. Over the same period, brand royalties paid by DB Insurance and affiliates totalled approximately KRW 220.3 billion. Align Partners said DB FIS generated an average operating margin of about 30%, compared with an estimated 3.8% for other IT service providers with similar business profiles, and argued this raised questions regarding pricing and board oversight.
The investor also criticised DB Insurance’s past transfer of 0.85% of its treasury shares, valued at KRW 77.8 billion, to an employee welfare fund before legislative discussions on mandatory cancellation of treasury stock under amendments to the Commercial Act. Align Partners described that transfer as a manoeuvre to “resurrect” voting rights for the benefit of the controlling shareholders and called for the retirement of the remaining 12.6% treasury share balance.
Beyond the legal AGM proposals, Align Partners’ public letter outlines an eight‑point engagement agenda to the DB Insurance board. First, it urges a shift from top‑line growth targets to management based on return on required capital, with underwriting and investment strategies assessed on risk‑adjusted returns and embedded value impact. Second, it proposes a tiered capital framework linked to K‑ICS ratios, including a target K‑ICS of 180% and a total payout ratio of at least 50% on a consolidated basis when capital exceeds that level, with share buybacks and cancellations prioritised while the stock is trading at what it views as a discount. In lower capital tiers, the framework would emphasise limiting growth in required capital, using reinsurance and asset allocation changes to reduce risk, and maintaining a minimum 35% payout ratio.
Other elements include ending what the investor describes as non‑competitive intra‑group IT contracts with DB FIS; explaining the basis for brand royalty charges and the decision to exclude DB Insurance from recent trademark registrations; and shifting to a joint trademark ownership model to reflect DB Insurance’s contribution to group earnings. Align Partners also calls for DB Insurance to stop further treasury share transfers to employee funds, adjust investor relations reporting to focus on per‑share indicators such as earnings per share and book value per share, and introduce CEO‑led quarterly earnings calls open to the market. In addition, it recommends revising compensation structures so that management pay is more closely tied to long‑term performance measures, including ROE and total shareholder return, referencing global and domestic insurers as benchmarks.
On board structure, Align Partners proposes several measures it says would be consistent with forthcoming Commercial Act amendments. These include setting a retirement age of 70 for inside directors, separating the roles of chief executive and chair, and appointing an outside director as chair of the board. The firm also advocates establishing a shareholder‑nominated director mechanism, under which minority shareholders holding at least 1% of outstanding shares for six months could recommend candidates for two audit committee seats that are elected separately. Align Partners suggests keeping the audit committee at three members and ensuring that shareholder‑nominated outside directors form a majority on remuneration and internal transaction committees. It further calls for policies reinforcing directors’ fiduciary duties to all shareholders and ongoing governance training.
Formally, Align Partners has placed two items on the agenda for DB Insurance’s 2026 AGM. The first is the election of two independent outside directors – Soo‑ah Min, former CEO of Samsung Active Asset Management, and Heung‑bum Choi, a former partner at Samjong KPMG and former associate vice president at AIG Insurance – who would also serve on the audit committee. Align Partners said it believes both are independent of DB Insurance and the controlling shareholder group and can provide “meaningful oversight and checks” on management and controlling interests. The second proposal seeks to re‑establish an internal transaction committee composed solely of outside directors. The committee, first created in 2014 and dissolved after five years, would be mandated to review in advance any board matters involving potential conflicts of interest, including related‑party dealings with controlling shareholders and affiliates. Align Partners has asked DB Insurance’s board to issue a written response to the letter and proposals and to present an updated “Value‑up” plan by March 6, 2026.
