On the 19th, Dongyang Life announced that Moody's, one of the world's top three credit rating agencies, maintained Dongyang Life's corporate credit rating at ‘Baa1’ and upgraded the rating outlook from 'Stable' to 'Positive'.
Exterior view of Dongyang Life Insurance. [Photo by Dongyang Life Insurance]
In this rating evaluation, Moody's highly rated Dongyang Life's solid and steady recurring investment income and the steadily increasing insurance contract margin. Moody's stated, “Under the new international accounting standards, Dongyang Life's return on capital (ROC) last year recorded a higher figure compared to other domestic insurers with Moody's credit ratings, indicating improved profitability. The new insurance contract margin increased by 34.6% to 760.2 billion KRW due to increased sales of whole life and health insurance products, and despite the high interest rate environment, the net investment yield rose to 3.8% from 2.7% in 2022, showing positive impacts from improved indicators.”
Moody's further explained, “Dongyang Life's overseas real estate exposure is mainly composed of senior tranches, and the average loan-to-value (LTV) ratio is relatively low, resulting in asset risk related to this being comparatively lower than domestic competitors. Over the next 12 to 18 months, Dongyang Life is expected to maintain a solvency ratio (K-ICS) above 175% based on steady insurance contract margin generation and effective risk management to improve capital efficiency.”
A Dongyang Life official stated, “The upgrade in the rating outlook signifies that despite the ongoing challenging domestic and international economic environment, the company has improved profitability and financial soundness through scale growth, and that Dongyang Life's management performance is being favorably evaluated in the global market. We expect this credit rating result to contribute to enhancing our external credibility and expanding future business opportunities.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
