AM Best affirms Korean Re’s Credit Ratings

KUALA LUMPUR, Dec 13 (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 Korean Reinsurance Company (Korean Re), South Korea.

AM Best said in a statement the outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Korean Re’s balance sheet strength, which AM Best assessed as very strong as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.

Korean Re’s risk-adjusted capitalisation is assessed at the strongest level as measured by Best’s capital adequacy ratio.The company’s capital showed solid growth in 2022, despite some unrealised losses from its available-for-sale bond holdings, supported by recent issuances of hybrid bonds to prepare for new accounting and solvency regimes (IFRS 17 and K-ICS) as well as to support its growing business.

AM Best notes that the impact of recent rising interest rates on the company’s capital was not material due to relatively short durations of its bond assets and a large share of held-to-maturity securities.

Korean Re’s balance sheet strength is also supported by good accessibility to capital market and a conservative investment strategy.

The company is ranked 13th in the global reinsurance market in terms of gross written premium (GWP) in 2021, supported by its dominant position in South Korea’s reinsurance market and its growing overseas business.

Despite the recent decline in domestic market share following its portfolio restructuring to improve profitability, AM Best believes that Korean Re’s market leadership will remain unchallenged over the medium term.

The company’s overseas business increased gradually and accounted for more than a quarter of its consolidated GWP in recent years, mainly through the company’s continued efforts in global expansion, especially to Europe, and North and Latin America in recent years.

-- BERNAMA