AM Best Affirms Excellent Ratings For Meritz Fire & Marine Insurance

KUALA LUMPUR, Nov 24 (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) for South Korea’s Meritz Fire & Marine Insurance Co Ltd (Meritz), with a stable outlook.

In a statement, AM Best said the credit ratings (ratings) reflected Meritz’s very strong balance sheet, strong operating performance, neutral business profile, and appropriate enterprise risk management.

Meritz’s capital position remains robust, supported by the strongest-level Best’s Capital Adequacy Ratio, one of the highest solvency ratios among Korean non-life insurers, and continued capital growth in 2024. Effective asset-liability management and strong internal capital generation underpin this resilience.

The insurer’s strong financial flexibility is demonstrated through successful hybrid and subordinated bond issuances and past capital injections from parent Meritz Financial Group Inc (MFG).

Operating performance remained solid, with a 30.5 per cent return on equity in 2024, favourable combined ratio levels, and robust investment returns.

Long-term insurance continued to drive profitability despite rising competition, while general and auto portfolios delivered stable earnings supported by high-yield fixed-income assets, including real estate-related loans.

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Meritz retained its position as South Korea’s fifth-largest non-life insurer in terms of gross insurance service revenue in 2024, expanding mainly through its long-term health insurance segment. While general agencies remain its core distribution channel, the company plans gradual diversification to support future growth.

AM Best noted that sustained improvement in balance sheet fundamentals could lead to positive rating action. Conversely, material deterioration in operating performance or a weakened credit profile at its parent could pressure the ratings.

-- BERNAMA