NongHyup P&C Insurance benefits from NACF’s support

Its capital and surplus saw significant growth in 2023 due to IFRS 17 adoption.

NongHyup Property and Casualty Insurance Company Limited (NH P&C) of South Korea showed robust risk-adjusted capitalisation, and adequate operating performance, and has a strategic role within the National Agricultural Cooperative Federation (NACF), according to AM Best.  

NH P&C’s balance sheet strength is bolstered by its “strongest” risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). 

The company’s capital and surplus saw significant growth in 2023 due to the adoption of IFRS 17, though its fundamentals remain stable. 

However, heightened volatility from interest rate fluctuations under new solvency and accounting standards poses challenges. To address these, NH P&C is intensifying its asset-liability management efforts to navigate the evolving solvency regime effectively.  

Despite setbacks from onerous contract provisions for long-term medical indemnity policies and major claims in general insurance, NH P&C’s prospective performance is expected to benefit from its contractual service margin (CSM) base and improved fundamentals in government policy insurance.  

Although its long-term insurance market share remains limited due to strong competition, the company is shifting its focus toward high-margin protection-type products to enhance underwriting profitability.  

The company benefits from explicit and implicit support, including capital infusions from NongHyup Financial Group (NHFG), reinsurance backing, and full expense reimbursement from the government for its crop insurance line.  

With a stable outlook, NH P&C is expected to maintain its strong capital base and leverage its role within the NACF ecosystem to support its strategic priorities amidst market challenges.