News Column

A.M. Best Affirms Ratings of Hyundai Marine & Fire Company, Ltd

June 23, 2014



ENP Newswire - 23 June 2014

Release date- 20062014 - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of 'a' of Hyundai Marine & Fire Insurance Company, Ltd. (HMFI) (South Korea).

The outlook for both ratings is stable.

The ratings reflect HMFI's adequate risk-adjusted capitalization and highly conservative investment profile.

HMFI's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR), declined in fiscal-year 2013 (nine months from March 2013 to December 2013), but remains at a supportive level for the current ratings. The company's capital and surplus dropped in fiscal-year 2013 due to decline in unrealized gains in bond investments, a result of higher market interest rates.

With a conservative investment strategy, HMFI mainly invests in fixed income assets and maintains a small exposure to equity securities. The company's investment portfolio has historically generated stable income and contributed to its operating results.

Following two years of deterioration in auto underwriting results, HMFI reported an improvement in its auto loss ratio to 84.2% in the first four months of fiscal-year 2014, compared with 86.9% in fiscal year 2013. The company also recorded a favorable increase in auto premium income during the four-month period, mainly due to an increase in auto renewal rates.

Offsetting rating factors are a worsening risk-loss ratio for HMFI's long-term lines and volatile operating performance at its two major wholly owned subsidiaries, Hyundai Hicardirect Auto Insurance Co., Ltd. and Hyundai Insurance (China) Co., Ltd. (China), which continue to report operating losses. HMFI's long- term risk loss ratio worsened in fiscal-year 2013 due to increased claims in medical indemnity products.

While HMFI is well positioned at its current rating level, negative rating actions could occur if HFMI's underwriting performance in long-term lines deteriorates substantially and causes a material deterioration of its risk-adjusted capitalization.

The methodology used in determining these interactive 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. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This rating announcement has been issued by A.M. Best Asia-Pacific Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

A.M. Best's credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions.

A.M. Best receives compensation for its rating services from the organizations that it rates, unless such ratings are identified with a Public Data modifier ('pd'). Public Data ratings are based on information available in the public domain and indicate the more limited scope of the rating and the fact that the company did not initiate the rating. A.M. Best does not send entities assigned a 'pd' rating an invoice for its rating services and does not assign ratings to securities issued by companies assigned a Best's 'pd' rating. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best Company and its subsidiaries are not registered as External Credit Assessment Institutions (ECAI) in the European Union (EU). Credit ratings issued by A.M. Best Company and its subsidiaries can not be used for regulatory purposes in the EU as per Directive 2006/48/EC.

A.M. Best's credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best - Europe Rating Services Limited (AMBERS), a subsidiary of A.M. Best Company, is an External Credit Assessment Institutions (ECAI) in the European Union (EU). Therefore, credit ratings issued by AMBERS may be used for regulatory purposes in the EU as per Directive 2006/48/EC.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: ENP Newswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters