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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

AM Best Affirms Credit Ratings of Hyundai Insurance (China) Co., Ltd.

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Hyundai Insurance (China) Co., Ltd. (HIC) (China). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect HIC’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management.

The negative outlooks reflect the pace of the projected fast deterioration in HIC’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), due to the combined effect of elevating underwriting risk and the expected capital erosion from cumulative operating losses over the short to intermediate term.

HIC’s very strong balance sheet strength assessment remains supported by its risk-adjusted capitalisation at the strongest level at year-end 2024, as measured by BCAR, notwithstanding the projected declining trend. Since its shareholding change in March 2020, HIC has continued to diversify its underwriting portfolio into individual lines from commercial property and engineering. The initial years of this business transformation led to consecutive underwriting losses that dragged the company’s capital & surplus from RMB 1.7 billion in March 2020 to RMB 1.28 billion in 2024. Furthermore, HIC’s latest business strategy puts stronger focus on insurance for electric vehicles, which is expected to be the premium growth driver going forward.

HIC’s operating performance remains marginal. The overall combined ratio remains high, albeit improving over the past few years, supported by improved operating efficiency, better economies of scale and stabilising performance in the key motor line. Conversely, the company continues to benefit from a steady stream of investment income through its cash and deposit holdings, with average investment yield in the mid-to-low single digit over the past few years. However, AM Best expects underwriting and total operating losses to sustain over the short to intermediate term.

HIC remains a small player in China’s non-life insurance market. The company has established good market standing in the niche market of the ride-hailing motor insurance business in some of the provinces where it operates. Nonetheless, AM Best expects HIC’s market presence to remain limited in the short to intermediate term.

Negative rating actions could occur if there is significant and adverse deviation in HIC’s business execution compared with its business plan, leading to material deterioration in its risk-adjusted capitalisation. Negative rating actions also could arise if the company’s operating performance materially deviates from its business plan and results in prolonged operating losses beyond AM Best’s expectations. Positive rating actions could occur if HIC demonstrates successful execution of its business plan; for example, achieving faster-than-expected turnaround and sustained improvement in its operating performance, while maintaining a supportive level of risk-adjusted capitalisation. AM Best will continue to monitor HIC’s business execution.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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