DB Insurance to keep competitive spot in Korea’s market – S&P Global

DBI's assessment could be dragged if its consolidated capital position deteriorates significantly.

Korea-based DB Insurance Co.’s robust risk control measures, diversified investment portfolio, and well-established business presence in Korea's property and casualty insurance market further solidify its position in the industry, according to S&P Global Ratings. 

The stable rating outlook signifies S&P Global's confidence in DBI's ability to maintain its very strong competitive position in Korea's insurance market and robust capitalization over the next two years. This positive outlook is underpinned by DBI's prudent underwriting philosophy, focus on protection-type products and an investment strategy that prioritizes long-term, high-quality bonds.

Whilst overseas expansion is expected to be gradual, DBI's steady growth trajectory aligns with its strategic objectives and reinforces its long-term viability and competitiveness in the global insurance landscape.

On 15 Nov. S&P Global published its revised criteria for analyzing insurers' risk-based capital, marking a significant development in the assessment of insurance companies' financial strength and creditworthiness. 

As a result of the implementation of the revised capital model criteria, S&P Global has announced a positive revision in its long-term financial strength and issuer credit ratings for DBI.

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The improved rating reflects S&P Global's enhanced view of DBI's capital adequacy, propelled primarily by an increase in total adjusted capital (TAC) due to the full inclusion of value-in-force (VIF). 

Furthermore, the benefits of risk diversification have been more explicitly captured in S&P Global's analysis, further supporting the improvement in DBI's capital adequacy.

S&P Global warns that the rating may be lowered if DBI's consolidated capital position, including its subsidiary DB Life Insurance, deteriorates significantly. This could be triggered by factors such as an aggressive investment strategy, weakened underwriting performance, or heightened capital volatility amid interest rate movements.

Conversely, whilst an upgrade is viewed as remote in the near term, S&P Global outlines criteria for potential future upgrades, including sustained strong profitability coupled with prudent investment strategies and an enhanced competitive position, particularly through overseas expansion.

The rationale behind the upgrade underscores S&P Global's confidence in DBI's strengthened capital adequacy and its ability to maintain strong performance over the next two years. With a stable internal capital generation and a focus on high-margin, long-term policies, DBI is poised for moderate business growth while effectively managing capital sensitivity to interest rate fluctuations.