A.M. Best Affirms Ratings of Dongbu Insurance Co.

HONG KONG--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a+” of Dongbu Insurance Co., Ltd. (Dongbu) (South Korea). The outlook for both ratings remains stable.

The ratings reflect Dongbu’s robust risk-adjusted capitalization, long-term track record of strong operating performance and sound market profile. Dongbu’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), improved in fiscal year 2014 and remained strong and supportive of the current ratings. The improvement was driven by the growth in the company’s capital and surplus, which increased in tandem with the growth in retained earnings.

Dongbu’s market share in the domestic non-life insurance market has grown gradually over the past five years. In order to adapt to the expected low growth phase over the short to medium term, the company continues to put strategic focus on developing and promoting the sale of profitable protection type products.

Partially offsetting these positive factors are the challenging underwriting environment and the continued low interest rate trend. Amid the gradually intensifying market competition and strengthening regulations, Dongbu experienced some negative impact from insufficient pricing, in particular in its medical and auto products. Moreover, the low interest rate environment also created downward pressure on the company’s investment yield.

While Dongbu is well-positioned at its current rating level, negative rating actions could occur if the company’s risk-adjusted capitalization experiences a material deterioration due to adverse operating performance.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best Company

James Chan

Financial Analyst

+852-2827-3424

james.chan@ambest.com

or

Seewon Oh

Associate Director

+852-2827-3404

seewon.oh@ambest.com

or

Christopher Sharkey

Manager, Public Relations

+(1) 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

or

Jim Peavy

Assistant Vice President, Public Relations

+(1) 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: A.M. Best Company