2013-10-10 18:02:01 -
A.M. Best Asia-Pacific Limited has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit rating (ICR) of “a” of Hyundai Marine & Fire Insurance Co., Ltd. (HMFI) (South Korea). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of “a-” of HMFI’s subsidiary, Hyundai Insurance (China) Co., Ltd. (HIC) (China). The outlook for all ratings is stable.
The ratings reflect HMFI’s improved capitalization, favorable operating performance and highly liquid investment portfolio.
HMFI has improved its risk-adjusted capitalization over the past five years, as measured by Best’s Capital Adequacy Ratio (BCAR). During that period, its capital and surplus grew at an average rate of 20%, primarily due to accumulation of retained earnings as well as
unrealized gains in its investment assets. A.M. Best believes HMFI’s capital position will continue to improve over the forecast period given its ability to generate net profits.
HMFI’s investment portfolio is highly conservative, with heavy allocation in fixed income assets and a smaller exposure to equity securities as compared to its peers. The portfolio has allowed the company to maintain a stable stream of investment income, which helped lower volatility in its operating performance and contributed to its favorable bottom line results.
Partially offsetting these positive rating factors are the deterioration in the auto loss ratio, the stiff competition in the Korean insurance market and the volatile underwriting performance of HMFI’s wholly owned mono-line subsidiary, Hyundai Hicar Direct Auto Insurance Company, Limited.
Negative rating actions may occur if there is a material deterioration in HMFI’s risk-adjusted capital position and/or operating performance.
The affirmation of HIC’s ratings recognizes its strong risk-adjusted capitalization and reduced underwriting volatility under its growing business portfolio. The ratings also consider HMFI’s support in terms of capital, business and reinsurance protection to HIC.
Partially offsetting these positive rating factors are HIC’s continued high expense ratio, although the ratio was on a downward trend given the company’s enlarged business volume and the challenges HIC faces in growing its portfolio outside of Korea interest- abroad business in China.
A.M. Best believes that HIC is well positioned at its current rating level. However, key rating factors that could lead to negative rating actions include significant deterioration in the company’s underwriting experience and/or risk-adjusted capital adequacy level.
The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
A.M. Best Asia-Pacific Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww ..
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
" title="http://cts.businesswire.com/ct/CT?id=bwnews&sty=20131010006074r1&sid=16929&distro=ftp\"/>" target="_blank" rel="nofollow">cts.businesswire.com/ct/CT?id=bwnews&sty=20131010006074r1&am ..
A.M. Best Co.Irene Chan, +852-2827-3423Associated
Financial Analyst email@example.com
: mailto:firstname.lastname@example.org orSeewon
Oh, +852-2827-3404Senior Financial Analyst email@example.com
: mailto:firstname.lastname@example.org orRachelle
Morrow, +(1) 908-439-2200, ext. 5378Senior Manager, Public
: mailto:email@example.com orJim
Peavy, +(1) 908-439-2200, ext. 5644Assistant Vice
President, Public Relations firstname.lastname@example.org