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Standard & Poor's Ratings Services today raised its counterparty credit and insurer financial
strength ratings on Seoul Guarantee Insurance Co. (SGIC) to 'A-' from 'BBB+', reflecting the company's strong operating performance. The outlook on the ratings is stable.
SGIC has recorded stronger-than-expected operating performance over the past few years, backed by the company¡¯s improved risk management system, reduced exposure to riskier business lines, and strong pricing power based on its monopolistic position.
The company has strengthened its underwriting discipline, backed by its improved risk management.
Supported by these improvements and the prevailing Korean credit cycle, SGIC¡¯s loss ratio has stabilized at a three-year average of 16.9% compared with a 10-year average of 143.3%. As a result, the company recorded stronger operating performance as evidenced by an increase in ROR to 56% in fiscal 2006 (ended March 31, 2007) from negative 19% in fiscal 2002 and negative 86% in fiscal 200l.
Over the next few years, SGIC is expected to maintain its strong operating performance, and thus improve its capitalization, backed by strong regulatory support, which enables the company to maintain its monopolistic position and solid profit margins. |
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