AM Best Affirms Credit Ratings of KB Insurance Co., Ltd.
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of
The ratings reflect KBI’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the support that the company receives from its parent, KB Financial Group Inc. (
KBI’s risk-adjusted capitalisation is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s capital and surplus increased significantly in 2023, largely due to the market-based valuation of insurance liabilities amid an elevated interest rate environment under IFRS 17, while its balance sheet fundamentals remained largely unchanged. After maintaining a no-dividend policy since 2019, under KB Group’s support to reinforce its capital in preparation for the new regulatory regime (i.e., K-ICS), the company resumed dividend payments in 2023, to support group-wide capital management and shareholder return policy due to sufficient capital buffers. Other balance sheet strength considerations include KBI’s low debt leverage and healthy coverage ratios, as well as its conservative investment strategy with a focus on asset liability management.
AM Best assesses KBI’s operating performance as adequate, with its return-on-equity and combined ratios being largely in line with its domestic industry average. The release of the contractual service margin (CSM) from long-term insurance has contributed to an increase in the company’s underwriting profitability, albeit it was partially offset by onerous contract provisions for medical indemnity claims in 2023. Prospectively, AM Best expects KBI’s long-term line profitability will continue to be supported by its sizeable CSM balance, while the auto and general lines remain relatively stable. Interest income remains a major source of investment profits, while its volatility to market conditions is viewed to be at a manageable level.
As a wholly owned subsidiary of
Strategically, KBI is important to
Negative rating actions could occur if there is a significant deterioration in KBI’s balance sheet strength fundamentals or if support from
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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Source: AM Best
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