Standard & Poor’s today revised the long-term insurer financial strength rating for Dongbu Insurance from stable to positive, and affirmed the long-term insurer financial strength rating at ‘BBB+’.
The changes reflect Standard and Poor’s view that Dongbu’s underwriting performance will remain stronger than its peers and they will maintain above average capitalization.
The ratings agency said Dongbu’s strengths included good market position, good underwriting performance and adequate capitalisation, but they have a weaker solicitor channel which would prove to be a key asset because of rising non-life insurance competition.
Dongbu is the third-largest insurance company in Korea. According to Standard and Poor’s the company will maintain its good market position because of various initiatives to revitalise its solicitor channel, as well as keep its current strong position in new sales channels.
In a statement, the ratings agency said, “the positive outlook reflects our view that Dongbu’s underwriting performance will remain stronger than its peers and improve its capitalization. Standard & Poor’s expects Dongbu to continue improving its underwriting performance through promoting sales efficiency and maintaining a competitive expense structure.
“We could consider upgrading Dongbu if the company successfully improves the profit base of its long-term business as well as enhances its risk management and capitalization. We could consider a negative rating action if its operating performance declines or capitalization deteriorates significantly.”
