A.M. Best Affirms Credit Ratings of DB Insurance Co., Ltd.

A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a+” of DB
Insurance Co., Ltd. (DBI) (South Korea). The outlook of these Credit
Ratings (ratings) is stable.

The ratings reflect DBI’s balance sheet strength, which A.M. Best
categorizes as strong, as well as its strong operating performance,
favorable business profile and appropriate enterprise risk management

DBI’s strong balance sheet assessment is supported by its sizeable
capital and surplus of KRW 4,415 billion reported in fiscal-year 2017,
the second largest among South Korean non-life insurers. Capital and
surplus has grown by an average of 10% per year over the past five
years, driven by net profit retention. However, DBI’s asset leverage
ratio remains high, leaving the company’s capitalization more
susceptible to asset valuation change.

Operating performance has consistently outperformed domestic industry
peers over the past five years, with an improving trend in its combined
ratio. In fiscal-year 2017, the company’s combined ratio was the lowest
among its major domestic peers.

DBI is the third-largest non-life insurer in South Korea in terms of
direct premiums written. The company has been able to slightly increase
its market share over the past five years despite the high competition
in its domestic market. DBI also benefits from diversification brought
by its life insurance subsidiary, DB Life Insurance Co., Ltd.
However, overseas expansion has been limited, leaving the company highly
concentrated in its competitive domestic market.

ERM is assessed as appropriate for DBI’s risk profile. The company has
been improving its ERM in response to the upcoming implementation of
IFRS 17 and K-ICS standards in South Korea in 2021. DBI’s investment
strategy is considered as conservative with a strong focus on
asset-liability management. In addition, the company has been
strengthening its underwriting capabilities.

Positive rating action is unlikely at this time. Negative rating action
could occur if the company’s risk-adjusted capitalization deteriorates
substantially. Negative rating action also could occur if an unfavorable
trend develops in operating performance.

Ratings are communicated to rated entities prior to publication.
Unless stated otherwise, the ratings were not amended subsequent to that

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. For more information, visit www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its

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