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Best’s News & Research Service - September 21, 2017 10:47 AM (EDT)

A.M. Best Affirms Credit Ratings of Construction Guarantee Cooperative

  • September 21, 2017 10:47 AM (EDT)
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Hong Kong //BestWire// - A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of “aa-” of Construction Guarantee Cooperative (CG) (South Korea). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect CG’s excellent risk-adjusted capitalization, profitable operating results and leading position in South Korea’s surety bond market for the construction industry.

CG is a cooperative organization that specializes in writing surety bonds for its members, which are general construction companies in South Korea.

The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains excellent, supported by its huge capital base of KRW 5.5 trillion (approximately USD 4.9 billion) at the end of 2016 and by its strong liquidity position.

Over the long term, CG has maintained profitable operating results due to its disciplined underwriting and credit risk management, although these results have been volatile because of the nature of the surety business. CG, under the supervision of the Ministry of Land, Infrastructure and Transport, supports the construction industry and maintains a strong market position.

Offsetting these positive rating factors are CG’s relatively high concentration in terms of product and geography, and South Korea’s highly competitive surety market.

While positive rating actions are unlikely, negative rating actions could occur if CG’s risk-adjusted capitalization materially deteriorates due to a significant accumulation of claims caused by a prolonged recession in the construction economy.

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 Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.



Financial Strength Hong Kong South Korea Press Release Insurance Issuer Credit Rating Best's Credit Rating Action Rating Event


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