A.M. Best Assigns Ratings to Hanwha General Insurance Company Limited
14.02.2012 19:56:11 -
(live-PR.com) -
A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of "bbb" to Hanwha General Insurance Company Limited (Hanwha Insurance) (South Korea). The outlook assigned to both ratings is stable.
The ratings reflect Hanwha Insurance´s progress in the restructuring of its investment portfolio and improved cost structure. The ratings also consider the company´s strong
relationship with the Hanwha group, which owns collectively 54.8% of Hanwha Insurance´s shares.
Since the merger of Hanwha Insurance and First Fire & Marine Insurance Co., Ltd. in December 2009, Hanwha Insurance has restructured its investment portfolio by increasing the proportion of its fixed income assets, which enables the company to earn stable returns and better match its liability profile.
The company improved its operating efficiency over the past two years due to reductions in both its personnel costs and commission payments as the merger process was completed.
Hanwha Insurance is well positioned to grow by leveraging its relationship with the Hanwha group, including Korea Life Insurance Company, Ltd., one of the leading conglomerates in South Korea that has as many as 56 affiliate companies with about 30,000 employees.
Partially offsetting these positive rating factors are Hanwha Insurance´s weak capital base, poor long-term risk loss ratio and motor business, as well as its high level of non-performing loans that are related to project finance loans.
Hanwha Insurance´s statutory solvency ratio stood at 157% at the end of September 2011. Hanwha Insurance seeks to further enhance its capital base with various measures. The company raised its subordinated debt in December 2011, which increased the solvency ratio to 167% at the end of December 2011 against the company´s mid-term target of 200%.
Hanwha Insurance continues to report a negative risk margin (claims-risk premium) in its long-term insurance, although the negative margin slightly declined in the first half of 2011 due to improved pricing.
Non-performing loans remain at a high level compared to the industry.
This is a result of deterioration in the project finance loans related to real estate, although the company has reduced its exposure over the past two years.
Positive rating actions could occur if both Hanwha Insurance´s risk-adjusted capitalization and operating results continue to improve.
Key factors that could trigger negative rating actions include deterioration in Hanwha Insurance´s underwriting and operating results over a period of time and erosion of its risk-adjusted capitalization.
The methodology used in determining these ratings is Best´s Credit Rating Methodology, which provides a comprehensive explanation of A.M.
Best´s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include.
"Understanding Universal BCAR ´"; "Catastrophe Analysis in A.M. Best Ratings"; "A.M. Best´s Ratings & the Treatment of Debt"; "Assessing Country Risk"; and "Risk Management and the Rating Process for Insurance Companies." Best´s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url= .. .
Founded in 1899, A.M. Best Company is the world´s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url= .. .
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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A.M. Best Co.Seewon Oh, +852-2827-3404Senior
Financial Analyst seewon.oh@ambest.com : mailto:seewon.oh@ambest.com orMoungmo
Lee, +852-2827-3402General Manager moungmo.lee@ambest.com : mailto:moungmo.lee@ambest.com orRachelle
Morrow, +(1) 908-439-2200, ext. 5378Senior Manager, Public
Relations rachelle.morrow@ambest.com : mailto:rachelle.morrow@ambest.com orJim
Peavy, +(1) 908-439-2200, ext. 5644Assistant Vice
President, Public Relations james.peavy@ambest.com : mailto:james.peavy@ambest.com
A.M. Best Co. has assigned a financial strength rating of B++ (Good) and an issuer credit rating of "bbb" to Hanwha General Insurance Company Limited (Hanwha Insurance) (South Korea). The outlook assigned to both ratings is stable.
The ratings reflect Hanwha Insurance´s progress in the restructuring of its investment portfolio and improved cost structure. The ratings also consider the company´s strong
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Since the merger of Hanwha Insurance and First Fire & Marine Insurance Co., Ltd. in December 2009, Hanwha Insurance has restructured its investment portfolio by increasing the proportion of its fixed income assets, which enables the company to earn stable returns and better match its liability profile.
The company improved its operating efficiency over the past two years due to reductions in both its personnel costs and commission payments as the merger process was completed.
Hanwha Insurance is well positioned to grow by leveraging its relationship with the Hanwha group, including Korea Life Insurance Company, Ltd., one of the leading conglomerates in South Korea that has as many as 56 affiliate companies with about 30,000 employees.
Partially offsetting these positive rating factors are Hanwha Insurance´s weak capital base, poor long-term risk loss ratio and motor business, as well as its high level of non-performing loans that are related to project finance loans.
Hanwha Insurance´s statutory solvency ratio stood at 157% at the end of September 2011. Hanwha Insurance seeks to further enhance its capital base with various measures. The company raised its subordinated debt in December 2011, which increased the solvency ratio to 167% at the end of December 2011 against the company´s mid-term target of 200%.
Hanwha Insurance continues to report a negative risk margin (claims-risk premium) in its long-term insurance, although the negative margin slightly declined in the first half of 2011 due to improved pricing.
Non-performing loans remain at a high level compared to the industry.
This is a result of deterioration in the project finance loans related to real estate, although the company has reduced its exposure over the past two years.
Positive rating actions could occur if both Hanwha Insurance´s risk-adjusted capitalization and operating results continue to improve.
Key factors that could trigger negative rating actions include deterioration in Hanwha Insurance´s underwriting and operating results over a period of time and erosion of its risk-adjusted capitalization.
The methodology used in determining these ratings is Best´s Credit Rating Methodology, which provides a comprehensive explanation of A.M.
Best´s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include.
"Understanding Universal BCAR ´"; "Catastrophe Analysis in A.M. Best Ratings"; "A.M. Best´s Ratings & the Treatment of Debt"; "Assessing Country Risk"; and "Risk Management and the Rating Process for Insurance Companies." Best´s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology : cts.businesswire.com/ct/CT?id=smartlink&url= .. .
Founded in 1899, A.M. Best Company is the world´s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com : cts.businesswire.com/ct/CT?id=smartlink&url= .. .
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.Seewon Oh, +852-2827-3404Senior
Financial Analyst seewon.oh@ambest.com : mailto:seewon.oh@ambest.com orMoungmo
Lee, +852-2827-3402General Manager moungmo.lee@ambest.com : mailto:moungmo.lee@ambest.com orRachelle
Morrow, +(1) 908-439-2200, ext. 5378Senior Manager, Public
Relations rachelle.morrow@ambest.com : mailto:rachelle.morrow@ambest.com orJim
Peavy, +(1) 908-439-2200, ext. 5644Assistant Vice
President, Public Relations james.peavy@ambest.com : mailto:james.peavy@ambest.com
