AM Best Affirms KBFG China Credit Ratings As Excellent

KUALA LUMPUR, March 14 (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 KBFG Insurance (China) Co Ltd (KBFG China), with a stable outlook.

These ratings reflect KBFG China’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

In a statement, AM Best said the ratings also reflected the wide range of support the company receives from its parent, KB Insurance Co Ltd, in areas of underwriting and pricing, business development and reinsurance.

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KBFG China’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio. The company’s consolidated capital and surplus have continued to increase, driven by positive operating performance with full profit retention.

The company maintains a low underwriting leverage, strictly limited net exposures to large commercial accounts and a conservative investment appetite. Its comprehensive reinsurance programme with a panel of financially sound reinsurers helps mitigate risks.

KBFG China has achieved positive operating profit over the last five years (2020 to 2024), with low-to-mid single-digit return-on-equity ratios reported during the period. The company’s underwriting performance has remained profitable, supported by low acquisition costs and positive reinsurance commission income despite the periodic unfavourable net loss experience.

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Its five-year average net combined ratio was 84.7 per cent based on AM Best’s calculations. Although management expenses are expected to rise moderately over the next three years due to a system upgrade, stable investment returns are expected to support the company's overall performance.

As a foreign-owned insurer focused on serving Korean interests abroad, KBFG China holds a competitive advantage in this niche market. However, the company has a limited market presence in China’s non-life industry with less than one per cent of total market share. AM Best views KBFG China’s ERM as appropriate for its risk profile.

-- BERNAMA