DB Insurance Co. Ltd.

The stable outlook reflects our view that DBI will maintain its very strong competitive position in Korea's insurance market and sound capitalization over the next 18-24 months. We believe DBI's prudent underwriting philosophy, shift toward protection products, and investment strategy that focuses on long-term high-quality bonds will support its capitalization. We may lower the rating if DBI's consolidated capital position, which includes DBL, deteriorates significantly. This could result from an aggressive investment strategy for loans or alternative investment securities, or a substantially weaker underwriting performance. Although it is unlikely, we may upgrade DBI if the insurer delivers strong and sustainable earnings with a prudent investment strategy that lead to a significant improvement in its capitalization over the next 18-24 months.

...DB Insurance Co. Ltd.'s (DBI)s continuing efforts to enhance pricing adequacy will support its financial performance. We anticipate the insurer's profitability will remain broadly stable after an improvement in 2020 and 2021. Premium hikes for loss-making medical indemnity insurance policies and cost control will underpin underwriting performance. This will largely offset a likely modest rise in auto loss ratios due to higher traffic volume amid an economic recovery. A rise in interest rates will also support investment returns. Moderate business growth prospects and broadly stable investment asset allocation to underpin capitalization. We expect DBI's premium growth to slow down to about 4% per year over the next few years, mainly driven by slower growth in auto and commercial insurance as premium hikes have been mostly reflected up to 2021. The insurer will likely continue to focus on long-term protection-type policies while reducing long-term savings products. Loans or securities with...

Full Report