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A.M. Best Removes Ratings of Hyundai Insurance (China) Co., Ltd. From Under Review with Negative Implications

June 5, 2014



HONG KONG--(BUSINESS WIRE)-- A.M. Besthas removed from under review with negative implications and affirmed the financial strength rating of A-(Excellent) and issuer credit rating of “a-” of Hyundai Insurance (China) Co., Ltd.(HIC) (China) The outlook assigned to both ratings is stable.

The rating action follows a capital injection by HIC’s parent company, Hyundai Marine & Fire Insurance Co., Ltd. (HMFI) (South Korea), and the reduction in reinsurance recoverables, which is related to the September 2013 fire at the factories of SK Hynix Inc. In addition, the ratings consider the implicit and explicit support that HIC receives from HMFI. HIC is a wholly owned subsidiary of HMFI.

In December 2013, the ratings of HIC were placed under review to reflect the large fire losses at the SK Hynix factories in Wuxi, China. While HIC’s net loss is limited to USD 1 million, its risk-adjusted capitalization deteriorated materially due to a spike in reinsurance recoverables, related to credit risk and concerns over liquidity.

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. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.





A.M. Best

Seewon Oh, +852-2827-3404

Senior Financial Analyst

seewon.oh@ambest.com

or

Moungmo Lee, +852-2827-3402

General Manager

moungmo.lee@ambest.com

or

Jim Peavy, +(1) 908-439-2200, ext. 5644

Assistant Vice President, Public Relations

james.peavy@ambest.com


Source: A.M. Best


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