AM Best has affirmed the A++ (Superior) Financial Strength Rating (FSR) and “aa+” (Superior) Long-Term Issuer Credit Ratings (ICR) of South Korea-based Samsung Fire & Marine Insurance Co., Ltd. (SFM) and its subsidiaries in the UK, Vietnam, and Singapore.
At the same time, AM Best also affirmed PT Asuransi Samsung Tugu (AST)’s FSR at A- (Excellent), along with an Indonesia National Scale Rating (NSR) of aaa.ID (Exceptional). The outlook for these ratings is stable.
Key Ratings Factors
SFM continues to deliver a stable underwriting performance, supported by a combined ratio that compares favourably against domestic peers, AM Best said. Its auto insurance line has remained profitable, driven by efficient underwriting and favourable regulations, while its overseas general insurance operations are expected to further enhance its profitability.
AM Best notes that SFM’s long-term performance is bolstered by its ability to generate a new business contractual service margin, providing a consistent source of future profit.
Meanwhile, the firm’s profitability is underpinned by robust investment income from a large asset base and a stable book of existing policies. Its leadership in long-term insurance and a growing online auto insurance segment continue to support its bottom line.
The company’s balance sheet strength is assessed to be at the strongest, backed by a risk-adjusted capitalisation expected to remain robust. As of year-end 2023, SFM holds a capital base of KRW16.1 trillion (US$ 12.4 bn). Despite exposure to market volatility, the company’s conservative investment strategy and debt-free position support its financial resilience.
SFM maintains the highest regulatory solvency ratio among non-life insurers in South Korea. Its risk-adjusted capitalisation is expected to remain at the strongest level, even with potential fluctuations due to interest rate movements and stock market changes.
AM Best regards SFM’s ERM framework as superior, emphasising its advanced risk management practices, which are considered more sophisticated than those of its domestic and international peers.
AST’s underwriting performance meanwhile is highly profitable, with a five-year average combined ratio of 28.3% from 2019 to 2023. This strong result is driven by low expense ratios, benefitting from reinsurance commission income and low acquisition costs via its direct distribution channels.
The company’s return on equity stands at a solid 9.4%, supported by consistent underwriting profitability and a stable stream of investment income.
The company continues to benefit from profitable underwriting, particularly in its focus on risks related to Samsung group affiliates, which have historically delivered favourable loss ratios compared to local Indonesian business.
AST’s balance sheet strength is assessed as strong, bolstered by low net underwriting leverage and a conservative, liquid investment portfolio. These factors help offset the impact of its relatively small absolute capital base.
Its risk-adjusted capitalisation remains at the strongest level, as measured by AM Best’s Capital Adequacy Ratio (BCAR). Though exposed to moderate credit risks from reinsurance partners, AST benefits from high-quality counterparties, supported by SFM’s strict counterparty monitoring.
While AST’s ERM is not as extensive as SFM’s, it follows strict risk management guidelines set by its parent company, ensuring a disciplined approach to risk and underwriting.
About Samsung Fire & Marine Insurance and PT Asuransi Samsung Tugu
Samsung Fire & Marine Insurance Co., Ltd. (SFM) is South Korea’s largest property and casualty insurer and a core subsidiary of the Samsung Group. Established in 1952, SFMI offers various non-life insurance products, including auto, fire, and marine insurance.
PT Asuransi Samsung Tugu (AST) is a joint venture between Samsung Fire & Marine Insurance Co., Ltd. (SFM) and PT Asuransi Tugu Pratama Indonesia Tbk, with 70% and 30% shareholding, respectively. The company primarily focuses on underwriting risks associated with Samsung group affiliates and other Korean enterprises operating in Indonesia. AST’s business model leverages its affiliation with SFM, benefiting from support in key areas including underwriting, marketing, risk management, and reinsurance.
