Financial Strength Rating : A, Positive

S&P raised the financial strength and counterparty credit ratings on Korean Re to 'A' from
'A-' in October 2014. The outlook is stable.

Korean Re has obtained "A" ratings from Standard & Poor's

S&P announced on October 24, 2014 that it raised the financial strength and counterparty credit ratings on Korean Re to 'A' from 'A-'. The rating upgrade reflected our sound risk-based capitalization, stable operating performance and adequate risk management with strong risk controls. The outlook on the ratings is stable. It is a long-awaited achievement since the last upgrade to 'A-' in 2006.

Recognizing Korean Re's consistently solid business results, S&P had indicated that it may raise the ratings on Korean Re if the reinsurer improves and maintains its capitalization, backed by stronger earnings that can be sustained. This prospect of a rating upgrade further encouraged the company to press ahead with plans to strengthen its capital base.

As part of the efforts, we successfully issued USD 200 milion worth of subordinated capital securities on October 15, 2014, the first of its kind from the Korean insurance industry. The newly raised funds will help us improve our balance sheet, with the total shareholders' equity exceeding USD 2 bilion. The enhanced capitalization led S&P to assess our financial risk profile as moderately strong, giving rise to the rating upgrade.

We believes the S&P rating upgrade will have profound implications for our overseas business given that credit ratings are one of the most important factors in cross-border reinsurance transactions. We will find ourselves in a better position to deal with more profitable accounts from abroad. Beyond the Asian market where we currently have a strong position, we now hope that we could gain a stronger footing in advanced markets in North America and Western Europe.

Expanding into overseas markets is one of the key goals of the company under Vision 2050: Value-Creating Reinsurance Leader, a declaration of our ambition to become one of the world's top 3 reinsurers announced at the beginning of this year. Currently, 22% of our annual revenue is generated from the international markets. The new vision sets out concrete plans to increase the share of our overseas business to 30% by 2020 and 50% by 2030, reflecting our desire to develop and discover growth drivers from abroad. The recent upgrade of the S&P ratings will certainly give Korean Re a leg up when we pursue the goals under Vision 2050.

Financial Strength Rating : A, Stable

A.M.Best credit rating upgraded from 'A-' to 'A(stable)' in 2011.

Korean Re's strong credit rating of "A" has been affirmed by A.M. Best

In October 2015, A.M. Best affirmed Korean Re’s financial strength rating of "A" (Excellent) and the issuer credit rating of “a” with the outlook for both ratings remaining stable. According to the rating agency, the affirmed ratings and continued stable outlook reflect Korean Re’s adequate risk-adjusted capitalization, stable operating performance and strong position in the domestic market. Its risk-adjusted capitalization increased year on year mostly due to the issuance of subordinated capital securities worth USD 200 million in October 2014. Over the past five years, Korean Re’s RBC ratio has been above 200%, way higher than the statutory minimum requirement of 100%, in spite of tightening regulatory capital standards.

The company has also been consistently focused on improving profitability through strategic retention management and operational efficiency. It reported KRW 141.5 billion in net income for the first six months of 2015, the highest first-half results in its history. This strong performance has been achieved thanks to the absence of large natural catastrophes, but it is also a result of the company’s drives to expand its overseas business and enhance risk management. Its overseas combined ratio has strongly improved, reaching the lowest level in ten years in June 2015. Korean Re has tightened its underwriting guidelines and improved its risk management since the Thai floods in 2011.