A.M. Best Affirms Rating of ING Life Insurance Korea Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A (Excellent) of ING Life Insurance Korea Limited (INGLK) (South Korea). The rating outlook is stable. The rating reflects INGLK's excellent brand recognition in the Korean life insurance market, well-balanced insurance portfolio between whole life and annuities, and efficient financial consultants' channel. The rating also reflects the superior operational efficiency and strong management team of the company. In addition, the company benefits from being the Korean life insurance arm in the ING Group's global insurance operation. Due to these positive factors, INGLK was able to grow its presence--measured by premium--as the fifth-largest player in the Korean life market to 3.5% in fiscal year 2003 from 2.5% in fiscal year 2002. In the first half of fiscal year 2004, INGLK became the fourth-largest life company with a market share of 4.6% in terms of premium. The company's compound annual premium growth rate was 79% during the last five years. As the growth rate of INGLK's whole life portfolio is showing signs of slowing down, the annuity portfolio is picking up. INGLK's net income increased 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. 103 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. 89 million) in fiscal year 2003 from KRW 79 billion (USD 69 million) in fiscal year 2002. As of the first half of fiscal year 2004, net income was KRW 123 billion (USD 107 million). The decreasing interest margin is offset by the increasing expense and risk margin. The company's financial position has also strengthened over the years. Risk-based capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , 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. ), improved in fiscal years 2002 and 2003. 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 stands at 177% as of fiscal year 2003. However, deferred acquisition costs of KRW 761 billion (USD 660 million) as of fiscal year 2003 compared to capitalization of KRW 233 (USD 202 million) is still considered high. Any risk charge on deferred acquisition costs will cause substantial strain on the company's capitalization. Partially offsetting these factors is the low interest rate environment that the life industry in Korea is facing. The company is generating a significant amount of positive cash flow, but the new money interest rate is below 5%. Another offsetting factor is the increasing competition in the market. Local companies had to focus on strengthening of solvency margins to meet requirements. But as the requirements are met, companies will focus on business generation again, initiating a new round of price competition. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. 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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