A.M. Best Affirms Credit Ratings of Korea P&I Club
The ratings reflect KP&I’s balance sheet strength, which
KP&I’s balance sheet strength is underpinned by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Although the growth rate of free reserves in 2017 slowed because of the reduced earnings from exchange rate losses, the five-year average growth rate stands high at 11%. The club’s low underwriting leverage and conservative investment profile also support its strong capitalization.
KP&I has maintained highly profitable operating performance with the five-year average return on equity of 10% with a modest level of volatility. However, the club experienced a sharp drop of net income in 2017 mainly due to the impact of exchange rate movement on its underwriting and investment performance.
With its business primarily concentrated in
KP&I’s risk management capabilities are considered appropriate given its risk profile. The club follows strict underwriting guidelines and maintains conservative reinsurance strategy.
KP&I was founded in 2000 under the Ship-Owners’ Mutual Protection and Indemnity Association Act. The club benefits from various support from the
Negative rating actions could occur if there is a material decrease in the club’s risk-adjusted capitalization or sustained deterioration in its operating performance.
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
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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