NongHyup Property and Casualty Insurance Company Limited Credit Ratings affirmed Excellent

KUALA LUMPUR, Dec 4 -- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of NongHyup Property and Casualty Insurance Company Limited (NH P&C) South Korea.

The outlook of these Credit Ratings (ratings) is stable, whereby the ratings reflect NH P&C’s balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

According to a statement from the global credit rating agency, the ratings also reflect the implicit and explicit support the company receives from its ultimate parent company, the National Agricultural Cooperative Federation (NACF).

The risk-adjusted capitalisation of NH P&C, as measured by Best’s Capital Adequacy Ratio, is assessed at the strongest level, supported by a capital increase of KRW 160 billion (US$140 million) in 2019 from its immediate parent, NongHyup Financial Group Inc. (US$1 = RM4.061)

NH P&C’s operating performance is assessed as being adequate with a five-year average operating ratio of 98.7 per cent (2015-2019) and a return-on-equity ratio of 3.2 per cent.

The company reported a slight improvement in 2019 net profit compared with 2018, during which it incurred large losses related to government policy products amid abnormal weather conditions.

NH P&C is strategically important to its ultimate parent, NACF, due to its role as an exclusive provider of government policy insurance to NACF cooperative members.

Negative rating actions could occur if there is a significant deterioration in the company’s risk-adjusted capitalisation or operating performance.

More details at www.ambest.com.

-- BERNAMA