Hanwha General should bolster its digital non-life subsidiary

HGI reported a consolidated ROE of 6.5% in 2023.

Hanwha General Insurance’s (HGI) ongoing initiatives are seen to improve profitability and scale the operations of its digital non-life subsidiary, Carrot General Insurance Company Limited, AM Best said.

HGI’s risk-adjusted capitalisation, measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level. 

The company's capital and surplus saw a significant increase at the end of 2023 under the IFRS 17 accounting standard, though this did not materially affect its balance sheet fundamentals. HGI maintains solid asset-liability management and strong financial flexibility, with wide access to capital markets.

In 2023, HGI reported a consolidated return on equity of 6.5% and a combined ratio of 95.9% under IFRS 17. Its long-term insurance profitability remained stable, with past rate hikes on legacy medical indemnity policies contributing to this stability. 

HGI is the sixth-largest non-life insurer in South Korea, holding a market share of approximately 6% in insurance service revenue in 2023, with a focus on long-term insurance. The rating also considers the implicit and explicit support from Hanwha Life, including co-branding, product distribution, and capital support.