AM Best Affirms Credit Ratings of DB Insurance Co., Ltd.

AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” (Superior) 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 AM Best assesses as very strong, as well as its strong operating performance, favourable business profile and appropriate enterprise risk management.

DBI’s risk-adjusted capitalisation is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects DBI’s capital will remain resilient amid an unfavourable business environment, such as interest rate movements, supported by its strong capability of internal capital generation and robust asset-liability management. The company has a relatively low dependency on supplementary capital securities, such as hybrid bonds and subordinated debts, while maintaining favourable financial flexibility.

AM Best assesses DBI’s operating performance as strong, underpinned by its underwriting performance, which outperforms its domestic peers, as demonstrated by its continued relatively low combined ratio and stable investment income. The company is expected to benefit from solid growth in its contractual service margin supported by a favourable new business margin in its long-term insurance line, which will provide a stable source of underwriting income in future years. DBI’s auto line is expected to remain profitable, while the increased volatility in the general property/casualty line (due to recent overseas natural catastrophe events) is anticipated to stay manageable following various initiatives to reduce natural catastrophe risk exposures. Investment income, which is composed largely of stable interest income from the fixed-income portfolio, has continued to support the company’s bottom line with robust investment assets.

DBI remains one of the leading non-life insurers in South Korea, with a market share of about 19% in terms of insurance service revenue in 2024. The company benefits from a strong brand in its domestic market and its diversified product offerings, which includes long-term, auto and general insurances. Additionally, the company’s profile is strengthened further by the life insurance business through its subsidiary, DB Life Insurance Co., Ltd. While DBI has a limited presence outside its domestic market, it has been cautiously seeking inorganic growth in the foreign market including acquisitions of two non-life insurers in Vietnam in 2024.

Negative rating actions could occur if there is a significant deterioration in DBI’s balance sheet strength fundamentals. Negative rating actions also could arise if the company shows a sustained deterioration in its operating performance to a level that no longer supports its current strong assessment. Although unlikely in the medium term, positive rating actions could occur if DBI demonstrates an unquestionable market leadership position with high brand recognition in its domestic and overseas markets.

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 AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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