Fitch Ratings has affirmed
The Outlook is Stable.
KEY RATING DRIVERS
The rating reflects TYL's 'Good' business profile as a mid-sized life insurer in
The revision in the Outlook to Stable from Evolving reflects Fitch's view that TYL's credit profile is not directly affected by that of its parent,
Nonetheless, there remains some uncertainty over TYL's strategic ownership in the short- to medium-term if DIG intends to sell its stake in TYL, although no formal timeframe is available. Fitch will evaluate the impact on TYL's credit profile if there is an eventual change in ownership.
Fitch assesses TYL's business profile as 'Moderate' compared with all other Korean life insurance companies due to its 'Moderate' business-risk profile and 'Moderate' operating scale. We therefore score TYL's business profile at 'bbb+' under our credit factor scoring guidelines.
TYL is
Fitch regards TYL's capital as 'Strong'. The company's regulatory risk-based capital ratio improved to 216% in 2019, from 205% in 2018, due to a subordinated debt issuance of
TYL's profitability has been supported by generally favourable loading and risk margins, although its interest margin tends to be volatile depending on market conditions. Overall, its return on assets (pre-tax) amounted to 0.5% and averaged about 0.6% over the past three years.
RATING SENSITIVITIES
Upgrade sensitivities include:
improvement in financial fundamentals, such as return on assets (pre-tax) persistently at 0.7% or above, and
Fitch Prism Model score well into the 'Strong' category on a sustained basis.
Downgrade sensitivities include:
significant decline in capitalisation, with TYL's risk-based capital ratio below 180% on a prolonged basis or its Fitch Prism Model score falling to the low end of the 'Adequate' category, or
sustained weakening in TYL's financial performance due to return on assets (pre-tax) falling consistently below 0.3%.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity.
RATING ACTIONS
ENTITY/DEBT RATING PRIOR
HIDE RATING ACTIONS
Ins Fin StrBBB+ Affirmed BBB+
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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