Construction Guarantee faces profit pressure amidst prolonged construction downturn

A notable rise in guarantee claims payments and reserves is expected to keep claims levels elevated.

Construction Guarantee Cooperative (CG) in South Korea will likely face sustained pressure on its underwriting results and overall profitability over the short to medium term, due to the prolonged downturn in the construction sector, according to AM Best.

A notable rise in guarantee claims payments and reserves in 2023 and the first half of 2024 is expected to keep claims levels elevated in the near future, as liquidity strains continue for some industry players.

CG’s risk-adjusted capitalisation, backed by a $5.3b capital base and low underwriting leverage, is projected to stay robust, supported by the company's conservative investment strategy focused on stable fixed-income assets.

Despite this, the pressures within the industry highlight the challenges CG faces in maintaining historical profitability levels in an uncertain market recovery environment.

Follow the link s for more news on

AM Best

insurance

risk management

Also Read

Prudential Hong Kong's APE sales jump 12% YoY

Brokers must ensure timely claim notification: Clyde & Co.

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit