A.M. Best Affirms Rating of Dongbu Insurance Company Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Dongbu Insurance Company Limited (Dongbu) (South Korea). The outlook is stable. The rating reflects the company's excellent capitalization, solid market position and persistency in operating performance. The company's flexible business strategy is another positive factor. Dongbu's financial position has strengthened in fiscal year 2003, as measured by the Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ). The Korean solvency ratio Solvency Ratio One of many ratios used to gauge a company's ability to meet long-term obligations. Notes: Derived by taking a company's net worth and dividing by total assets. See also: Asset, Asset Valuation, Balance Sheet, Fundamental Analysis, Income Statement , which stands at 224.6% as of fiscal year 2003, also reflects the company's strong solvency position. Through strengthening its position in commercial lines, Dongbu has been able to maintain its overall premium market share of 14% as of fiscal year 2003, when other companies with direct distribution channels have been aggressively penetrating the motor insurance market. The company has successfully entered the bancassurance Bancassurance A French term referring to the selling of insurance through a bank's established distribution channels. Notes: The result is a bank that can offer banking, insurance, lending, and investment products to a customer. channel in September 2003, taking the lead position in this channel, and in July 2004 the company launched its direct distribution channel. Net Income deteriorated to KRW KRW In currencies, this is the abbreviation for the Korean Won. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 45 billion (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 38 million) in fiscal year 2003 compared to KRW 79 billion (USD 66 million) in fiscal year 2002. Although the investment income saw a slight improvement due to the bullish stock market, the underwriting income Underwriting income For an insurance company, the difference between the premiums earned and the costs of settling claims. dropped to KRW -69 billion (USD -58 million) in fiscal year 2003 compared to KRW 24 billion (USD 20 million) in fiscal year 2002. The deterioration is mainly due to the higher loss ratio in motor insurance business. The company successfully manages to maintain one of the lowest expense ratios in the Korean non-life industry. Offsetting these positive attributes are the continuation of the low interest rate environment, increasing popularity of direct distribution channels and the company's relatively high strategic investments including Anam Semiconductor, Hana Bank and Dongbu Life Dongbu Life Insurance Co, Ltd. (Hangul: 동부생명) is a South Korean insurance company, headquartered in Seoul and established in 1989. The life insurance group division of the company controls a large portion of the South Korean calling card market life . In light of today's low Today's Low The intra-day low trading price. Notes: In other words, this is the lowest price that a stock traded at during the course of the day. More often than not this is lower than the closing price. See also: Today's High interest-rate environment, the company faces a significant margin squeeze in its long-term savings products. To cope with this problem, the company is shifting its business portfolio towards variable interest products as well as protection type products with fewer savings features attached. Market penetration of companies selling products through direct channels will increase. With increased competition from bancassurance and other financial institutions, long-term products, including protection type products, may face severe competition in the near future. Dongbu's strategic investments (Anam Semiconductor and Hana Bank), including its investment in Dongbu Life, may impose some volatility on its capital. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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