HONG KONG–(BUSINESS WIRE)–AM Best has maintained the under review with developing implications status for the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Hyundai Insurance (China) Co., Ltd. (HIC) (China).
The Credit Ratings (ratings) reflect HIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
These ratings were placed under review with developing implications on July 30, 2019, following an announcement that HIC planned to raise additional capital through four new investors. On March 10, 2020, HIC obtained regulatory approval to receive capital injections from four new investors, namely Legend Holdings Corporation (Legend Holdings); Dirun (Tianjin) Technology Co., Ltd. (Dirun); Anhui Easy-Biz Digital Technology Co., Ltd.; and Ningbo Meishan Bonded Port Area Sequoia Yaosheng Equity Investment Partnership. Following the capital injections, HIC’s paid-in capital increased to RMB 1.7 billion (USD 240 million) from RMB 550 million (USD 79 million). The parent company, Hyundai Marine & Fire Insurance Co., Ltd. (HMF), did not participate in the capital injection; as a result, its stake in HIC was diluted to 33% from 100%, while Legend Holdings and Dirun each hold a 32% stake.
HIC’s very strong balance sheet strength is underpinned by its enlarged capital base and strengthened risk-adjusted capitalization due to the capital injections. Further, AM Best views that the strategic importance of HIC to HMF has diminished significantly in tandem with the change in HIC’s shareholding structure. HIC’s ratings will remain under review while AM Best continues to hold discussions with the company’s shareholders and management team to assess the full rating impact.
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.
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