AM Best Affirms Excellent Ratings For South Korea’s KB Insurance

KUALA LUMPUR, Nov 3 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of South Korea’s KB Insurance Co Ltd (KBI), with a stable outlook.

In a statement, AM Best said the credit ratings (ratings) reflected KBI’s balance sheet strength, which was assessed 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.

The global credit rating agency highlighted KBI’s risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio. The company’s local solvency ratio remains largely in line with the industry average amid a decline in market interest rates and discount rate cuts by the local regulator.

KBI exhibits good accessibility to the capital market underpinned by its recent and past successful subordinated debt issuances and maintains low debt leverage and healthy coverage ratios. Its conservative asset-liability management approach continues to anchor its financial resilience.

AM Best assesses KBI’s operating performance as adequate, with its return-on-equity and combined ratios comparable to domestic industry peers. The company’s long-term insurance segment is expected to benefit from the release of its sizable contractual service margin base, though profitability will be tempered by rising medical claims across the sector in 2025.

The auto insurance line remains under pressure from prior base rate cuts and inflation-driven repair costs, but KBI is expanding its online sales channels to achieve scale and improve efficiency, even as short-term costs rise in a competitive market. Interest income continues to be the primary contributor to investment profits.

As the fourth-largest non-life insurer in South Korea, holding around 13 per cent market share in 2024, KBI’s strategic value to KB Group is clear; it remains the group’s only non-life insurance arm, playing a key role in diversifying the conglomerate’s financial services portfolio.

Since its affiliation into KB Group in 2015, KBI has received both explicit and implicit support, including direct capital injections and a no-dividend policy between 2019 and 2022 to strengthen its capital base, as well as shared branding and distribution resources.

-- BERNAMA