Hyundai Marine & Fire Insurance Co. (HMF) has been downgraded by rating agency A.M. Best from stable to negative, it has been revealed.

While A.M. Best revised the outlook on the insurer, it affirmed the company’s Financial Strength Rating of A (Excellent) and its Long-Term Issuer Credit rating of “a”.

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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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