A.M. Best Affirms Credit Ratings of Hanwha General Insurance Company Limited

HONG KONG--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Hanwha General Insurance Company Limited (HGI) (South Korea). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect HGI’s adequate risk-adjusted capitalization and recent improvement in its operating results. In addition, the ratings incorporate the implicit and explicit support the company receives from its parent company, Hanwha Life Insurance Co., Ltd.

HGI’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), decreased in 2016 due to an increase in investment and underwriting risks that was stronger than the growth of capital and surplus. The company reported strong growth in net premium income in 2016, driven by increases in premium rates and retention in its major business line of long-term insurance. However, the current ratings are supported by factors that include HGI’s proactive capital management strategies and conservative investment portfolio. Moreover, the company reported considerable improvement in profitability over the past three years, owing to measures such as restructuring its insurance portfolio and increases in premium rates.

Partially offsetting rating factors include the company’s increased reliance on reinsurance arrangements for its long-term insurance business line and its high asset leverage, which could cause volatility in profitability and capitalization. Positive rating actions could occur if HGI demonstrates a stable track record in operating performance and capitalization. Negative rating actions could occur if the company’s operating performance or risk-adjusted capitalization deteriorates significantly, or if there is a sizeable decline in the parent company’s financial strength and credit profile.

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 A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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A.M. Best

Seewon Oh, +852 2827 3404

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Moungmo Lee, +65 6589 8412

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Jim Peavy, +1 908 439 2200, ext. 5644

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Source: A.M. Best