Press Release - JULY 11, 2019

AM Best Affirms Credit Ratings of DB Insurance Co., Ltd.

 Chanyoung Lee
Senior Financial Analyst
+852 2827 3404

Christie Lee
Senior Director, Analytics
+852 2827 3413

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


HONG KONG - JULY 11, 2019
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of DB Insurance Co., Ltd. (DBI) (South Korea). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect DBI’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

DBI’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed as strongest, supported by the steady growth of its capital and surplus on the back of a solid net income stream, as well as relatively low underwriting leverage compared with its domestic peers.

DBI’s operating performance has outperformed its domestic peers over the past five years, as shown by its strong investment performance and having the lowest combined ratio among its domestic peers. Overall underwriting performance deteriorated year over year in 2018, mainly due to increasing losses in the auto insurance line of business; however, the insurer’s strong investment earnings of over KRW 1 trillion supported its overall performance.

DBI is the third largest non-life insurer in South Korea in terms of direct premium written (DPW), a longstanding position that the company has maintained successfully amid increasing competition. The company’s widely recognized brand in its domestic market and diversified product mix, which includes the life insurance business from its subsidiary, DB Life Insurance Co., Ltd, as well as its leading position in South Korea’s insurance industry in terms of digital innovation also support the favorable business profile assessment.

DBI has been enhancing its ERM to prepare for the upcoming implementation of International Financial Reporting Standards (IFRS) 17 and the K-Insurance Capital Standard (K-ICS) in 2022, which includes development of its own internal capital model. The company also augmented its risk management structure for group-related risks, such as risks to subsidiaries and internal group transactions.

Negative rating actions could occur if the company’s operating performance or risk-adjusted capitalization deteriorates significantly. Positive rating actions could occur if the company’s risk-adjusted capitalization improves materially.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.

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