AM Best has affirmed the credit ratings for Korean Reinsurance Company (KRE). KRE is based in South Korea and operates globally. Specifically, AM Best affirmed the Financial Strength Rating of A (Excellent). They also affirmed the Long-Term Issuer Credit Rating of “a+” (Excellent). The outlook for both ratings remains stable overall. The ratings reflect KRE’s strong balance sheet successfully. Furthermore, they reflect the company’s adequate operating performance. They also noted a favorable business profile. Finally, the company has appropriate enterprise risk management.
KRE’s risk-adjusted capitalization is assessed comfortably. It is measured at the strongest level possible. This is according to Best’s Capital Adequacy Ratio (BCAR). AM Best expects the company to maintain its capitalisation highly. This is supported by controlled growth in underwriting risk greatly. It also relies on a stable stream of income consistently. KRE shows a strong solvency ratio overall. This resilience is strengthened by effective asset-liability management. This helps KRE handle various changes in the business environment efficiently. The company’s conservative investment strategy also supports the balance sheet.
Business Profile and Operating Performance
AM Best assesses KRE’s operating performance as adequate overall. They reported a return-on-equity ratio of 9.4% recently. The company’s property/casualty lines improved in 2024 significantly. This was largely due to the absence of major natural catastrophes. It was also due to fewer large-scale claims internationally. The various measures implemented by KRE will help performance. These include improving domestic treaty terms. They also reduced exposure to overseas catastrophe risks strategically. This supports underwriting profit stability over time.
KRE holds the dominant market position in South Korea. It is the only local reinsurer successfully operating there. KRE was ranked as the seventh-largest IFRS 17 reinsurer globally. This was measured by gross insurance service revenue in 2024. Despite increased competition, this dominant position will remain unchallenged. KRE’s overseas business continues to expand gradually. This growth is underpinned by expansion in Europe and the Americas.
Negative rating actions could occur under certain circumstances. This would happen if there is a sustained, deteriorating trend. This trend would be in KRE’s operating performance metrics. Conversely, positive rating actions are also possible to achieve. These could occur if KRE demonstrates strong, consistent results. Such results must positively distinguish KRE from its industry peers quickly.
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News Source: Businesswire.com
