AM Best Affirms Excellent Credit Ratings of Korean Reinsurance

KUALA LUMPUR, Dec 16 (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 Korean Reinsurance Company (KRE).

The outlook for these credit ratings (ratings) is stable, reflecting KRE’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favourable business profile and appropriate enterprise risk management.

As the dominant and only local reinsurer in South Korea, KRE’s risk-adjusted capitalisation is assessed comfortably at the strongest level, as measured by Best’s Capital Adequacy Ratio, according to AM Best in a statement.

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The credit rating agency expects the company to maintain its risk-adjusted capitalisation at an elevated level, supported by its controlled growth of underwriting risk through continued portfolio restructuring and a stable stream of income.

KRE’s strong solvency ratio and effective asset-liability management strengthen its resilience to changes in the business environment, such as interest rate fluctuations and regulatory changes, as well as provide a capital buffer for future business expansion.

AM Best assesses KRE’s operating performance as adequate, with a return-on-equity ratio of 9.4 per cent and a non-life combined ratio of 91.5 per cent. In 2024, its property/casualty lines recorded an improvement largely due to the absence of major natural catastrophes and large-scale claims in domestic and overseas markets.

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While profitability in the life and health segment declined in 2024 due to valuation adjustments and higher claims, AM Best expects performance to improve following ongoing portfolio enhancements in domestic and overseas markets. Investment income is expected to remain robust, supported by a growing asset base and returns from alternative investments.

KRE was ranked as the seventh-largest IFRS 17 reporting reinsurer in the global reinsurance market in terms of gross insurance service revenue in 2024. Despite its ongoing portfolio restructuring in the domestic market, AM Best believes that KRE’s dominant market position will remain unchallenged over the medium term.

-- BERNAMA