NONGHYUP PROPERTY AND CASUALTY INSURANCE COMPANY LIMITED CREDIT RATINGS AFFIRMED - AM BEST

KUALA LUMPUR, Dec 6 (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 NongHyup Property and Casualty Insurance Company Limited (NH P&C) (South Korea).

The outlook of these Credit Ratings (ratings) is stable, according to a statement.

The ratings reflect NH P&C’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect the implicit and explicit support the company receives from its ultimate parent, the National Agricultural Cooperative Federation (NACF).

The risk-adjusted capitalisation of NH P&C is assessed as very strong, as measured by Best’s Capital Adequacy Ratio (BCAR). Although its capital is susceptible to moderate volatility caused by the recent rise in long-term investment yields, NH P&C’s capital and surplus grew in 2020 and in the first nine months of 2021 due to a solid expansion of retained earnings.

NH P&C has maintained a zero-dividend policy since 2017 to strengthen its capitalisation in preparation for IFRS 17 and K-ICS, a new solvency regime that will be implemented in South Korea. The company’s highly conservative investment portfolio, consisting largely of high-quality fixed-income assets, also supports the current balance sheet strength assessment.

NH P&C’s operating performance is assessed as adequate with a five-year average operating ratio (2016-2020) of 98.2 per cent and a return-on-equity ratio of 3.3 per cent. The company reported favourable underwriting performance in 2020 mainly due to improved claims experience and robust premium growth in the long-term insurance line, coupled with an enhanced expense ratio.

NH P&C is a wholly-owned subsidiary of NongHyup Financial Group Inc (NHFG), which is the financial arm of NACF and one of the largest financial groups in South Korea.

While the long-term insurance line comprises its largest share of its business, NH P&C is also the exclusive provider of South Korea’s government policy insurance such as crop and livestock insurance.

Headquartered in the United States, AM Best does business in over 100 countries.

For more information, visit www.ambest.com.

-- BERNAMA