KOREAN RE UPGRADED BY S&P TO SINGLE A MINUS

Korean Re has had its financial strength and long-term counterparty credit ratings raised by Standard & Poor’s to single A minus from triple B plus. S&P said that the upgrade reflected Korean Re’s improved capitalisation, with adjusted capital increasing to 731bn won in March this year, compared with 653bn won in March the year before. S&P said that the reinsurer was expected to be able to maintain capitalisation appropriate to its new rating, for which the outlook is stable. S&P noted that Korean Re’s investment strategy was conservative, with fixed-income accounting for about 85% of its assets, and that its enterprise risk management was adequate. However, S&P said that “due to the rapid expansion in premium revenue ... it is unlikely that the company’s capitalisation will rise significantly” in the near future, making a further upgrade to single A or double A unlikely in the near term. S&P also warned that the outlook could be revised downward from stable to negative if the company’s aggressive expansion overseas, currently at about 20% a year, negatively impacted earnings and capitalisation.