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FOR IMMEDIATE RELEASE
HONG KONG - OCTOBER 20, 2016 11:51 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Meritz Fire & Marine Insurance Co., Ltd. (Meritz) (South Korea). The outlook of these Credit Ratings (ratings) is stable.
The rating affirmations reflect Meritz’s adequate risk-adjusted capitalization and profitable operating performance.
The company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remains at an adequate level to support its current ratings. Meritz reported strong growth in net profit in fiscal-year 2015, driven by increased net investment income, as the company realized capital gains on its fixed income portfolio.
Partially offsetting these positive rating factors are the increasing cost structure, mainly driven by the rise in sales expenses for tied and general agents, and the low interest rate environment that negatively affects long-term insurance profitability.
While positive rating actions are unlikely, negative rating actions could occur if there is significant deterioration in the company’s underwriting performance or risk-adjusted capitalization.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.