KUALA LUMPUR, March 30 -- AM Best has affirmed the Financial Strength Rating of A- (excellent) and the Long-Term Issuer Credit Rating of ‘a-’ of LIG Insurance (China) Co Ltd (LIG China) China.
According to a statement by AM Best, the outlook of these ratings is stable.
The ratings reflect LIG China’s balance sheet strength, which AM Best described as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect the wide range of support the company receives from its parent, KB Insurance Co Ltd, in areas including business development, reinsurance and investment.
LIG China’s balance sheet strength is supported by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio.
Due to its small capital base and underwriting of large commercial accounts, the company’s risk-adjusted capitalisation is exposed to volatility in the event of large losses.
Despite low acquisition costs contributed by its direct distribution channel and reinsurance commission income, LIG China’s overall technical results have remained volatile because of its fluctuating loss ratio and high management expense ratio due to its small net earned premium base.
As a foreign-owned insurer focusing on servicing Korean Interests Abroad business, LIG China has a defensible competitive advantage in this niche market, despite accounting for a small market share of the overall domestic non-life market.
-- BERNAMA
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