2013-02-28 17:31:23 -
A.M. Best Asia- Pacific Limited has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Korean Reinsurance Company (Korean Re) (South Korea). The outlook for both ratings is stable.
The ratings reflect Korean Re’s adequate risk-adjusted capitalization, strengthening risk management scheme and the stable operating performance in its domestic businesses. The risk-adjusted capitalization, measured by Best’s Capital Adequacy Ratio (BCAR), is expected to remain at an adequate level for Korean Re’s current rating level. This adequate level is supported by the company’s efforts to reduce its underwriting risks and enhance its capital with a prompt disposal of the treasury stock after the losses from the Thailand floods last year. In addition, Korean Re has
enhanced its risk management scheme by setting more conservative risk measurements; and consequently, reducing the aggregate risk amount.
Korean Re reported a stable operating performance in its domestic business, which accounts for about 80% of total premium income in the past five years. This total premium income is attributed to Korean Re’s extensive local market knowledge and the favorable underwriting terms with its direct insurers as the company maintains its dominant position in the Korean reinsurance market.
An offsetting rating factor is Korean Re’s volatile operating performance in its overseas businesses in the past five years.
Downward rating pressure could arise if its risk-adjusted capitalization deteriorates to a level that is below A.M. Best’s expectations.
The methodology used in determining these 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. Key criteria utilized include.
“Understanding Universal BCAR”; “Catastrophe Analysis in A.M. Best Ratings”; “Evaluating Country Risk”; and “Risk Management and the Rating Process for Insurance Companies.” 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 ..
Founded in 1899, 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 ..
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A.M. Best Co.Seewon OhSenior Financial
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