AM Best Affirms Credit Ratings of Hyundai Marine & Fire Insurance Co., Ltd.
18 Julio 2024 - 8:19AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a”
(Excellent) of Hyundai Marine & Fire Insurance Co., Ltd. (HMF)
(South Korea). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect HMF’s balance sheet strength, which AM Best
assesses as strong, as well as its adequate operating performance,
favourable business profile and appropriate enterprise risk
management.
HMF’s risk-adjusted capitalisation is assessed at the strongest
level, as measured by Best’s Capital Adequacy Ratio (BCAR). Under
IFRS 17, HMF’s capital and surplus increased significantly at
year-end 2023 largely due to the market-based valuation of
liability and a higher interest rate environment while its balance
sheet fundamentals are not viewed to be affected materially. The
company has good financial flexibility, demonstrated by successful
issuances of hybrid bonds and subordinated debts in the capital
markets over the past years, while maintaining healthy debt
leverage and coverage ratios. HMF’s investment strategy
incorporates its philosophy to focus on asset-liability management
to manage the capital volatility with a large portion of its
investment portfolio placed in high-quality fixed income
assets.
AM Best assesses HMF’s operating performance as adequate, with a
return-on-equity ratio of 7.8% and a combined ratio of 96.0%
(net/net, IFRS 17-basis) in 2023, as calculated by AM Best. The
release of the contractual service margin from long-term insurance
products contributed to a large portion of underwriting profits,
although it was offset partially by increased medical claims and
sizeable onerous contract provision in 2023. That said, AM Best
expects HMF’s long-term insurance line results to improve from
premium rate increases and its efforts to improve the medical
indemnity loss ratio trend, while both auto and general lines
remain relatively stable. Interest income remains the major source
of investment profits while additional volatility under IFRS 9 is
viewed to be at manageable level.
HMF remains one of the leading non-life insurers in South Korea,
with a stable market share of about 18% in terms of insurance
service revenue in 2023. The company benefits from its solid
business relationships with Hyundai conglomerates, including
Hyundai Motor Group, which provide a steady source of business for
its general insurance line. HMF maintains a diversified portfolio,
in terms of product offerings and distribution channels, to achieve
stable business revenue. The company focuses on the general agency
channel in the long-term insurance line and the online channel in
auto insurance for growth and profitability.
Negative rating actions could occur if there is a sustained
deteriorating trend in HMF’s operating performance. Positive rating
actions could occur if the company’s balance sheet strength
fundamentals demonstrate sustained improvement.
Ratings are communicated to rated entities prior to
publication. Unless stated otherwise, the ratings were not amended
subsequent to that communication.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Performance Assessments, Best’s Preliminary Credit
Assessments and AM Best press releases, please view Guide to
Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240718449222/en/
Seokjae Lee Financial Analyst +852 2827
3407 seokjae.lee@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Chanyoung Lee Director, Analytics +852 2857
3404 chanyoung.lee@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com