Seoul: Global credit rating agency, AM Best, has affirmed South Korea’s Hanwha General Insurance Company Limited (HGI) financial strength rating at A (Excellent) and the long-term issuer credit rating at ‘a’ (Excellent), both with a stable outlook.

According to BERNAMA News Agency, these ratings reflect HGI’s strong balance sheet, characterized by adequate operating performance, a neutral business profile, and appropriate enterprise risk management. The company also benefits from the support of its parent company, Hanwha Life Insurance Co Ltd (Hanwha Life).

AM Best noted in a statement that HGI’s risk-adjusted capitalisation, assessed via its Capital Adequacy Ratio, is at the strongest level. Despite a moderate decline in capital and surplus at the end of 2024, attributed to lower interest rates and regulatory changes, HGI has implemented effective mitigation strategies. These include issuing subordinated bonds and utilizing reinsurance, which are seen as supportive despite an increase in debt leverage.

HGI’s operating performance remains solid, boasting a 10 percent return on equity and a combined ratio of 94.2 percent under IFRS 17. The company’s stable financial results are attributed to improved profitability from legacy medical policies and strong investment returns.

Ranked sixth in South Korea’s non-life sector, HGI holds about six percent of the market share and is expanding its reach in the long-term insurance sector through key distribution channels, including Hanwha Life Financial Services, a sales-specialized subsidiary of Hanwha Life.

AM Best’s ratings further reflect the consistent capital, operational, and distribution support from Hanwha Life, South Korea’s second-largest life insurer, underscoring strong group integration and brand synergy.

Future rating upgrades depend on sustained capital strength across both HGI and Hanwha Life. Conversely, a downgrade could occur if there is reduced support from Hanwha Life or if its financial standing deteriorates.