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 Korean Reinsurance Company (KRE) (South Korea). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect KRE’s strong risk-adjusted capitalization, competitive position in the domestic market and solid operating performance.
KRE’s risk-adjusted capitalization remains strong to support its current ratings, reflecting stable underwriting leverage and a low investment risk profile. The company has produced solid underwriting results from its commercial lines, with an increased retention owing to the enlarged capital base after the issuance of subordinated debt in 2014. KRE also continues to report a stable profit from its core personal lines business in the domestic market.
KRE maintains an established business profile, with its stable market share in South Korea. In light of the ongoing expansion and restructuring of the overseas business, KRE is trying to diversify its portfolio by reducing its dependency on property while tapping more into specialty lines.
Offsetting rating factors include the challenges KRE faces in its overseas expansion in the current soft market environment and potential volatility from overseas catastrophe exposures. The sluggish growth outlook in Korea’s domestic market, increased retention by primary insurers and new market entrants in 2016 continue to drive intense market competition.
Negative rating actions could occur if there is a material decrease in capitalization triggered by large-scale catastrophe losses.
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.
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