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Courtesy of AIR: South Korea - Samsung Fire & Marine shows highest profitability

South Korea's largest general insurer Samsung Fire & Marine Insurance (SFM) consistently outperforms its domestic peers in underwriting profitability with a superior level of stability, notes AM Best.

The insurer’s combined ratio was the lowest in South Korea’s insurance industry for 2019, despite an industry-wide deterioration in underwriting performance during the year. More recently in 2020, SFM reported better underwriting performance, mainly driven by improved profitability in the auto insurance line following a series of rate hikes since 2019, and a reduced car accident rate during the COVID-19 pandemic. Combined with the impact of increased rates in the auto insurance line, AM Best expects this positive underwriting trend to continue into the second half of 2020 amid the current pandemic.

AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa+” of SFM. AM Best also has revised the outlook to stable from negative.

The ratings reflect SFM’s balance sheet strength, which AM Best categorises as strongest, as well as its strong operating performance, very favourable business profile and very strong enterprise risk management (ERM).

SFM’s risk adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level, underpinned by its substantial capital and surplus of $12bn at year-end 2019. Its robust balance sheet strength is also supported by the company’s low asset and underwriting leverage compared with its domestic peers, as well as highest regulatory risk-based capital ratio within South Korea’s non-life insurance segment.


SFM’s investment strategy is deemed highly conservative; the majority of its investments are allocated in fixed-income assets while the company maintains a relatively small proportion of overseas and alternative investments compared with its peers, which offsets concentration risk from its affiliated stock holdings.

Notwithstanding the increasing pressure on investment yield amid an ultra-low interest rate environment, AM Best expects investment income to maintain a solid base for the company’s overall bottom line given its substantial volume of investment assets.

Business profile

With a strong brand and a large captive agent distribution network, SFM has maintained its leadership position in South Korea’s non-life insurance segment, accounting for approximately 24% of total industry premiums in 2019. SFM also has a dominant presence in the online auto insurance segment. As the pioneer in South Korea’s online auto insurance business, SFM has a strong competitive advantage, which includes its high quality customer base, a large accumulated database and the scale to maximise cost efficiency.

SFM has a limited presence in overseas markets, but its global expansion strategy marked a notable advancement in 2019 as the company acquired a significant minority stake in Canopius Group, a participant in the Lloyd’s market. SFM is actively seeking global business opportunities in collaboration with Canopius.

With a group risk management culture entrenched in the organisation and a robust governance structure, SFM’s risk management capabilities are superior to its domestic and international peers with similar business profiles.

By Asia Insurance Review Team


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