A.M. Best Affirms Credit Ratings of KB Insurance Co., Ltd.

A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of a of KB Insurance Co., Ltd. (KB Insurance) (South Korea). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect KB Insurances balance sheet strength, which A.M. Best categorizes as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also consider the strategic importance and support KB Insurance receives from the parent company, KB Financial Group Inc. (KB Group).

KB Insurances risk-adjusted capitalization, as measured by Bests Capital Adequacy Ratio (BCAR), is at the very strong level. The company has a conservative investment portfolio and growing capital and surplus, having benefited from improved profitability and a relatively low dividend payout ratio. Asset leverage has declined over the past five years but remains high, exposing the companys capital and surplus to asset valuation change.

KBIs operating performance has improved over the past five years albeit with moderate volatility. The improvement was driven mainly by increasing net investment income. The companys combined ratio, which had underperformed its major peers historically, has caught up over the past three years. However, the companys overall operating performance still trails its major peers.

KBI is the fourth-largest non-life insurer in South Korea. The company benefits from the KB brand and from being a wholly owned subsidiary of the KB Group. Nevertheless, KBIs overseas business profile is limited, and in particular, the companys U.S. business has struggled with poor operating performance for the past years.


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A.M. Best considers the companys risk management capabilities as appropriate for its risk profile. KB Insurance has been improving its risk management framework as it prepares for upcoming regulatory changes. The company benefits from the groups risk management expertise and its integrated ERM.

KB Insurance is important to the group in terms of business diversification and enables the group to provide a wider range of financial services. The group provided KB Insurance with capital support in 2015 and 2016, and turned it into a wholly owned subsidiary in 2017. KB Insurance also benefits from implicit support in areas such as investment, human resources and business infrastructure.

Positive rating action is unlikely in the near term. Negative rating actions could occur if there is a material deterioration in the companys risk-adjusted capitalization. Negative rating actions could occur if there is a significant decline in the parent companys financial strength and credit profile.

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. Bests 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. Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and A.M. Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

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

A.M. Best
Sergio Hidenori Agena
Associate Financial Analyst
2827 3407

[email protected]
Director, Analytics
+852 2827 3413

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

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

[email protected]