HONG KONG--(BUSINESS WIRE)--Jul 13, 2018--A.M. 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 A.M. Best categorizes as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).

DBI’s strong balance sheet assessment is supported by its sizeable capital and surplus of KRW 4,415 billion reported in fiscal-year 2017, the second largest among South Korean non-life insurers. Capital and surplus has grown by an average of 10% per year over the past five years, driven by net profit retention. However, DBI’s asset leverage ratio remains high, leaving the company’s capitalization more susceptible to asset valuation change.

Operating performance has consistently outperformed domestic industry peers over the past five years, with an improving trend in its combined ratio. In fiscal-year 2017, the company’s combined ratio was the lowest among its major domestic peers.

DBI is the third-largest non-life insurer in South Korea in terms of direct premiums written. The company has been able to slightly increase its market share over the past five years despite the high competition in its domestic market. DBI also benefits from diversification brought by its life insurance subsidiary, DB Life Insurance Co., Ltd. However, overseas expansion has been limited, leaving the company highly concentrated in its competitive domestic market.

ERM is assessed as appropriate for DBI’s risk profile. The company has been improving its ERM in response to the upcoming implementation of IFRS 17 and K-ICS standards in South Korea in 2021. DBI’s investment strategy is considered as conservative with a strong focus on asset-liability management. In addition, the company has been strengthening its underwriting capabilities.

Positive rating action is unlikely at this time. Negative rating action could occur if the company’s risk-adjusted capitalization deteriorates substantially. Negative rating action also could occur if an unfavorable trend develops in 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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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PUB: 07/13/2018 12:46 PM/DISC: 07/13/2018 12:46 PM