A.M. Best has placed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” of Hyundai Insurance Co. (HIC) under review with developing implications.
This was down to recent plans by the company to raise additional capital through four new investors, pending regulatory approval.
HIC and its parent company, Hyundai Marine & Fire Insurance, have entered into a capital injection agreement with four new investors for HIC: Legend Holdings Corporation; Dirun Technology; Anhui Easy-Biz Digital Technology; and Ningbo Meishan Bonded Port Area Sequoia Yaosheng Equity Investment Partnership.
Under this agreement, Legend Holdings, a diversified investment holding company based in Beijing, China, and Dirun, a Tianjin-based company focused on computer and information technology development and services, will each inject RMB 533 million (USD 77 million) into HIC.
Easy-Biz and Yaosheng will inject RMB 25 million (USD 3.6 million) each into HIC. Legend Holdings and Lenovo Group, holds both strategic and financial investments across various sectors, including but not limited to information technology and financial services.
Legend Holdings has been listed on the Hong Kong Stock Exchange since 2015, with more than RMB 83 billion (USD 12 billion) in net assets at year-end 2018.
A.M. Best expects HIC’s future strategic cooperation with its new investors to strengthen the company’s distribution network and business growth, as well as to promote innovation and portfolio diversification in the long term.
It expects HMF to continue to provide support to the HIC in various areas, including business generation and reinsurance cessions, before the transaction is completed, after which HMF’s control over HIC is expected to weaken.
The under review status reflects uncertainties over HIC’s future strategic direction and business plans at this stage.
The deal remains subject to regulatory approval, and HIC’s ratings will remain under review until the close of the transaction.
AM Best will continue to hold discussions with HIC’s and HMF’s management teams on future business and management plans to fully assess the impact on the HIC's credit profile.