AM Best Affirms Credit Ratings of KB Insurance Co., Ltd.

HONG KONG--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of KB Insurance Co., Ltd. (KBI) (South Korea). The outlook of these Credit Ratings (ratings) is stable.

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. (KB Group) and its strategic importance to the parent.

KBI’s risk-adjusted capitalisation is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s local solvency ratio remains largely in line with the industry average amid an unfavourable business environment, such as a decline in market interest rates and discount rate cuts by the local regulator. KBI exhibited good accessibility to the capital market underpinned by its recent and past successful issuances of subordinated debts, and maintains low debt leverage and healthy coverage ratios. The company’s investment strategy remains conservative, 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 peers. The company’s major business line of long-term insurance is expected to be supported by the release of its large contractual service margin base, albeit facing headwinds in its profitability from an industry-wide increase in medical claims during 2025. While the auto line experiences some negative underwriting pressure, due to the cumulative effect of prior base rate cuts and inflation on repair costs, KBI remains focused on growing its online channel to improve its auto line profitability. This KBI hopes to achieve by economies of scale, despite the potential increase in expenses over the short term amid strong market competition. Interest income remains a major source of the company’s investment profits.

As a wholly owned subsidiary of KB Group, one of the largest financial holding companies in South Korea, KBI remains the fourth-largest non-life insurer in the country with a stable market share of approximately 13% based on gross insurance service revenue in 2024. Strategically, KBI is important to the parent in terms of business diversification, since it is the only non-life insurer within the group. Since its affiliation into KB Group in 2015, KBI has a track record of receiving explicit support including direct capital support and a no-dividend policy between 2019 and 2022, to bolster its capitalisation. Implicit support includes shared distribution channels and group-wide marketing activities under the KB Group brand in both domestic and overseas markets.

Negative rating actions could occur if there is a significant deterioration in KBI’s balance sheet strength fundamentals or if support from KB Group is reduced to a degree that no longer supports the current level of enhancement. Positive rating actions could occur if KBI’s operating performance demonstrates strong and consistent results to positively distinguish itself from industry peers.

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

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AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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