By Yoon Ja-young
Staff Reporter
Kyobo Life Insurance, one of the top three players in the life insurance industry here, was assigned an A2 insurance financial strength (IFS) rating by Moody's Investors Service. This is the first time that Moody's has assigned a rating to Kyobo Life.
``Moody's A2 IFS rating of Kyobo Life reflects its long operating history and its top position in the Korean life market," said Sally Yim, an assistant vice president and analyst at Moody's. She added that the insurer has a very strong household brand name along with the other two big life insurers.
``Its product profile, which includes whole life, annuity, health/disability, savings, investment-linked, protection and retirement products, is well diversified," Yim said. ``Moreover, the company relies mainly on financial planners ― that is solicitors ― as its main distribution channel, and their productivity has gradually improved over the past few years.''
She explained that Kyobo's capital injection of 370 billion won last November and increase in profits helped improve its solvency margin ratio.
A Kyobo Life Insurance spokesperson said the A2 rating by Moody's shows that it acknowledged the management innovation effort since 2000. ``We expect it to help build up investor trust, working positively on insurance sales including retirement annuity,'' he said. Kyobo was rated AAA, the top rating, by a number of local credit rating agencies.
Most of the local insurers rated by global rating agencies like Moody's are non-life insurers listed on the bourse. Though not listed on the stock market yet, the huge improvement in financial stability motivated Kyobo to solicit rating by the international rating agency. Its return on equity (ROE) averages 20 percent for the last three years, comparable to that of global financial companies.