Seoul: AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of 'a' (Excellent) for South Korea's Hyundai Marine and Fire Insurance Co Ltd (HMF), maintaining a stable outlook for the company.

According to BERNAMA News Agency, the credit ratings reflect the insurer's strong balance sheet strength, adequate operating performance, favourable business profile, and appropriate enterprise risk management. The global credit rating agency highlighted HMF's risk-adjusted capitalisation as being at the strongest level, based on Best's Capital Adequacy Ratio. In 2025, the company's local solvency position improved, aided by higher interest rates and initiatives to reduce the duration gap between assets and liabilities.

AM Best noted that HMF maintains good financial flexibility, with a history of issuing supplementary capital securities. However, the agency observed an increase in the company's adjusted financial leverage following multiple rounds of subordinated debt issuance over recent years.

In 2025, the insurer achieved a double-digit return on equity and a combined ratio of 96.8 per cent, as calculated by AM Best. The profitability of its long-term insurance business faced challenges due to higher loss ratios in medical indemnity policies. Similarly, its auto insurance segment experienced underwriting losses, attributed to premium rate cuts, heightened competition, and inflation-driven claims costs.

Nonetheless, strong investment income bolstered overall earnings in 2025, supported by gains from asset disposals and increased interest income in an advantageous interest rate environment.

HMF remains a leading non-life insurer in South Korea, with an estimated 17 per cent market share based on gross insurance service revenue in 2025. AM Best emphasized that the company benefits from a diversified product portfolio and distribution network, as well as longstanding relationships with Hyundai group companies, particularly in its marine insurance operations.