AM BEST AFFIRMS SOUTH KOREA’S HANWHA GENERAL INSURANCE CREDIT RATINGS

KUALA LUMPUR, July 10 (Bernama) -- AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Hanwha General Insurance Company Limited (HGI), South Korea.

According to the global credit rating agency in a statement, the outlook of these Credit Ratings (ratings) is stable.

The ratings reflect HGI’s balance sheet strength, which AM Best assessed as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management, as well as reflecting the support that the company receives from its parent, Hanwha Life Insurance Co Ltd (Hanwha Life).

HGI’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, is assessed at the strongest level, underpinned by various capital replenishment actions undertaken by the company in 2022.

Although the company faced pressure on its reported capital from rising interest rates in 2022, AM Best expects the interest rate sensitivity of capital and solvency ratio to be largely subdued under the new accounting and solvency regimes (IFRS 17 and K-ICS), further supported by HGI’s improved asset-liability durations in recent years.

With a five-year average consolidated return on equity of 5.5 per cent (2018-2022), HGI’s operating performance assessment remains as adequate.

Profitability of its long-term insurance line improved materially in 2022 as the accumulated effect of the rate hikes in prior years for unprofitable legacy medical indemnity policies started to materialise.

HGI is the sixth-largest non-life insurance company in South Korea, with a market share of approximately seven per cent in terms of gross premiums written in 2022, as well as a business focus on long-term insurance.

The rating lift considers various forms of implicit and explicit support from Hanwha Life, the second-largest life insurer in the country in terms of premium income, including co-branding to increase operational synergy, product distribution and capital support.

-- BERNAMA