Insurance rating agency A.M. Best has revised its outlook on Hyundai Marine & Fire Insurance Co. (HMF), according to a news release. A.M. Best revised the outlook from stable to negative and affirmed the company’s Financial Strength Rating of A (Excellent) and its Long-Term Issuer Credit rating of “a”.
The revised outlook reflects HMF’s increased asset leverage over the last five years, which A.M. Best said leaves the insurer’s capitalization more susceptible to asset-value fluctuation. The rating also reflects HMF’s lower risk-adjusted capitalization and its relatively high level of underwriting leverage compared to similar insurers.
HMF could see positive rating actions if it can achieve “sustainable improvement in its risk-adjusted capitalization while continuing to strengthen its profitability,” according to A.M. Best. Negative ratings action could be seen if HMF’s risk-adjusted capitalization or profitability deteriorates substantially.
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