AM Best Affirms Credit Ratings of KBFG Insurance (China) 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 KBFG Insurance (China) Co., Ltd. (KBFG China) (China). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect KBFG China’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also reflect the wide range of support that the company receives from its parent, KB Insurance Co., Ltd., in areas including underwriting and pricing, business development, reinsurance and risk management.

KBFG China’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The company’s consolidated capital and surplus have continued to increase, backed by positive operating performance with full profit retention. KBFG China maintains a low underwriting leverage, limited net exposure to large commercial accounts and a conservative investment appetite. The company has in place a comprehensive reinsurance programme with a panel of financially sound reinsurers. KBFG China’s statutory core solvency ratio improved from 501% in 2024 to 671% at year-end 2025, owing to the complete settlement of sizeable reinsurance recoverables as planned.

KBFG China has reported positive operating profit over the last five years (2021 to 2025), with low-to-mid-single digit return-on-equity ratios reported during that period. The company experienced a slight decline in top-line performance for a third consecutive year in 2025, primarily due to reduced client exposures and rate reductions driven by favourable loss experience. KBFG China has formulated a mitigation plan to regain business growth momentum, while maintaining a stable net exposure. The company’s underwriting profitability has remained stable, supported by low acquisition costs and positive reinsurance commission income. Stable investment returns are expected to remain a key contributor to KBFG China’s overall operating results.

As a foreign-owned insurer focusing on serving Korean interests abroad, KBFG China has a defensible competitive advantage in this niche market. However, the company has a limited market presence in China’s non-life segment with less than 1% of total market share. AM Best views KBFG China’s ERM as appropriate for its risk profile.

Negative rating actions could occur if there is a diminished level of support from KB Insurance Co., Ltd., such as a material reduction in explicit or implicit support extended to the subsidiary. Negative rating actions also may arise from a sustained deteriorating trend in the company’s operating performance. Positive rating actions may occur if there is a significant increase in KBFG China’s capital size with robust risk-adjusted capitalisation.

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.

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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