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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  KB Financial Group Inc.    A105560   KR7105560007


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KB Financial : AM Best Affirms Credit Ratings of KB Insurance Co., Ltd

11/09/2020 | 05:02am EST

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of 'a' of KB Insurance Co., Ltd. (KBI) (South Korea).

The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect KBI's balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the support that the company receives from its parent, KB Financial Group Inc. (KB Group) and its strategic importance to KB Group.

The risk-adjusted capitalisation of KBI, as measured by Best's Capital Adequacy Ratio (BCAR), remained at the very strong level, supported by its full profit retention in 2019, as well as increased unrealised gains from its securities holdings amid the low interest rate environment. The company's relatively low dividend payout ratio (weighted five-year average of 9.6% [2015-2019]) has allowed it to grow capital organically through profit retention. KBI demonstrates a good quality of capital with the majority composed of retained earnings, without any supplementary capital instruments.

KBI's balance sheet strength is also underpinned by its conservative investment portfolio with the majority of investments placed in fixed-income securities, along with an increasing share of alternative investments. As part of its asset-liability management strategy and given the COVID-19 pandemic's impact on the capital markets, the company recently re-aligned its mid-term investment strategy to focus on greater stability in its investment portfolio.

KBI's operating performance is assessed as adequate with a five-year average consolidated return-on-equity ratio of 8.9% (2015-2019) and an operating ratio of 96.3%. Amid industry-wide deterioration in underwriting performance caused by increased claims from the long-term and auto insurance lines, KBI's underwriting profitability worsened in 2019 with both its loss and expense ratios rising compared with 2018. KBI's moderately volatile underwriting performance is partially offset by its stable and growing stream of investment income.

KBI remains the fourth-largest non-life insurer in South Korea, with a market share of approximately 13% based on direct premium written in 2019, which has remained stable over the past five years despite fierce competition. The company has limited operations abroad, with overseas business representing less than 1% of KBI's consolidated gross premium written in 2019.

As a wholly owned subsidiary of KB Group since 2017, one of the largest financial holding companies in South Korea, KBI is strategically important to its parent in terms of business diversification, as it helps to solidify the group's value proposition as a comprehensive financial service provider. In addition to the history of explicit capital support from the group, dividend payouts have remained low since 2016 as KB Group expanded its shareholding in the company; no dividend was paid to the group in 2019 and 2020 in order to strengthen KBI's capitalisation, especially given recent profit deterioration. As KB Group places an emphasis on synergy among its subsidiaries to provide better customer service, KBI benefits through business opportunities such as customer referrals from its affiliates and cross-selling through shared distribution channels, as well as group-wide marketing activities under one KB brand.

Negative rating actions could occur if there is a significant deterioration in the company's risk-adjusted capitalisation or operating performance. Negative rating actions may also arise if support from KB Group is reduced to a degree that no longer supports the current level of credit enhancement.

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

This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

(C) 2020 Electronic News Publishing, source ENP Newswire

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Sales 2020 12 318 B 11,2 B 11,2 B
Net income 2020 3 453 B 3,14 B 3,14 B
Net Debt 2020 - - -
P/E ratio 2020 5,18x
Yield 2020 4,79%
Capitalization 17 436 B 15 849 M 15 832 M
Capi. / Sales 2020 1 416x
Capi. / Sales 2021 1 368x
Nbr of Employees 25 428
Free-Float 92,5%
Duration : Period :
KB Financial Group Inc. Technical Analysis Chart | A105560 | KR7105560007 | MarketScreener
Technical analysis trends KB FINANCIAL GROUP INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 25
Average target price 55 556,00 KRW
Last Close Price 44 750,00 KRW
Spread / Highest target 43,0%
Spread / Average Target 24,1%
Spread / Lowest Target -3,91%
EPS Revisions
Managers and Directors
Jong-Kyoo Yoon Chairman & Chief Executive Officer
Ki-Hwan Kim Chief Financial Officer & Senior Executive VP
Woo-Yeol Lee Chief Information Technology Officer
Woo Yeul Lee Chief Information Technology Officer
B Solomon Stuart Independent Director
Sector and Competitors