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FOR IMMEDIATE RELEASE
HONG KONG - AUGUST 17, 2016 12:11 PM (EDT)
A.M. Best has removed from under review with negative implications and affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of Hyundai Insurance (China) Co., Ltd. (HIC) (China). The outlook assigned to each rating is negative.
The rating actions reflect HIC’s adequate risk-adjusted capitalization, which has recovered over the past six months with credit risk decreasing on the progress in settling claims related to the Aug.12, 2015, Tianjin Port explosions. In addition, HIC receives a wide range of support from its parent company, Hyundai Marine & Fire Insurance Co., Ltd., which is currently working on a recapitalization plan for HIC.
The negative outlooks reflect the company’s exposure to potentially large credit risk and continued weak operational performance with high volatility. Although HIC maintains low retention and has been reducing gross risk exposures, fronting large risks relative to their capital could potentially expose the company to credit and liquidity risks.
Positive rating action could occur if HIC sustains improvement in operating results to a level in line with its higher-rated peers. Negative rating action could occur if the planned recapitalization fails in the near term or there is a material decrease in risk-adjusted capitalization due to deterioration in operating performance.
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 rating(s) that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page.
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