Best’s News & Research Service - August 24, 2017 08:42 AM (EDT)
A.M. Best Affirms Credit Ratings of Korea P&I Club
- August 24, 2017 08:42 AM (EDT)
Hong Kong //BestWire// - A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Korea P&I Club (KP&I) (South Korea). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect KP&I’s solid risk-adjusted capitalization and adequate operating performance. Additionally, the club has a favorable business profile, offering protection and indemnity (P&I) insurance coverage primarily to its members in Korea.
KP&I’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains strong, owing to its low underwriting leverage and conservative investment profile. Although the club has slightly increased its net retention limit in 2017, A.M. Best expects its risk-adjusted capitalization to remain at solid levels, underpinned by its prudent underwriting guidance.
The club has maintained profitable operating performance over the past five years while reporting a modest level of volatility in key metrics, primarily driven by underwriting performance.
KP&I has gradually increased its premium income in 2017 amid the prolonged recession in the shipping market, due to various initiatives including a new coinsurance program with an International Group of P&I club member to target the larger vessel market in Korea.
While positive rating actions are unlikely in the near future, negative rating actions could occur if there is a material decrease in the club’s risk-adjusted capitalization or sustained deterioration in its operating performance.
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 A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.