KBFG Insurance (China) Co., Ltd. (KBFG China) is poised to maintain its consistent underwriting performance, according to a recent report from AM Best. The company’s operating performance is expected to remain stable, supported by a robust balance sheet and strong capitalisation.
AM Best projects that KBFG China’s balance sheet strength will continue to be very strong, with risk-adjusted capitalisation at the highest level, as reflected by the company’s Capital Adequacy Ratio (BCAR). This financial position has been bolstered by full profit retention, which has led to steady growth in the company’s capital and surplus, a trend expected to persist.
KBFG China has not paid dividends over the past five years, and the company intends to maintain this strategy to fund its future expansion efforts.
Despite moderate increases in management expenses linked to an ongoing system upgrade, KBFG China’s operating performance is anticipated to remain stable. The company has posted consistent profitability over the past five years, with a five-year average net combined ratio of 84.7%. Underwriting performance has benefitted from low acquisition costs and positive reinsurance commission income, although occasional unfavorable loss experience continues to be a challenge. Investment returns are expected to support overall financial results.
Although KBFG China has carved out a defensible niche by serving Korean interests abroad, its market share in China’s non-life insurance sector remains below 1%. Nevertheless, AM Best views the company’s enterprise risk management practices as appropriate for its current risk profile, with no significant changes expected in the near future.
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