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A.M. Best Affirms Rating of Samsung Fire & Marine Insurance Company.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 5, 2003

A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of Samsung Fire & Marine Insurance Company Limited (SFMI) (South Korea). The rating outlook is stable.

The rating reflects the company's superior risk-adjusted capitalization, dominant market position and consistent operating performance.

SFMI has generated stable underwriting results over the past decade. Pre-tax return on net premium has been over 6% during the last two years while the five-year average is 5.3%. The company's combined ratio has been consistent at 100% during the last two years. In addition, with an investment portfolio concentrated mainly with fixed income instruments, the company has achieved consistent returns with limited volatility.

SFMI has maintained strong capitalization with the highest solvency position amongst all Korean non-life companies over the past few years. The Korean regulatory solvency measure stood at 380% in fiscal year 2002. On an adjusted basis, the company's risk-bearing insurance underwriting leverage at the end of financial year 2002 was 1.12 times. The company's Best's Capital Adequacy Ratio, measuring an insurer's balance sheet strength on an adjusted risk basis, reflects its solid financial position.

As the most dominant player in the Korean non-life insurance industry, SFMI expanded its overall market share to 31.6% in financial year 2002 from 29.2% in the previous year without impacting the quality of its underwriting portfolio. Because of this strengthened market position, the company has a market growth rate of 13.6%, outperforming the industry average of 8.7%.

Offsetting these positive rating factors are the low interest environment and the increasing popularity of direct channel and bancassurance.

As long as the low interest rate environment prevails, SFMI's investment margin is not expected to show significant improvement due to the asset mix in its investment portfolio. In fact, similar to many insurers, the company is adjusting its portfolio towards protection oriented products with fewer saving features. As more and more companies penetrate markets through direct channel and bancassurance, greater competition is expected, especially in the line of long-term saving products.

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 www.ambest.com.
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Publication:Business Wire
Date:Nov 5, 2003
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