Moody's Assigns A3(hyb) Rating to Hanwha Life Insurance's Junior Subordinated Capital Securities

Strategic Insights -

Moody's has assigned an A3(hyb) rating to the proposed USD-denominated junior subordinated capital securities to be issued by Hanwha Life Insurance Co., Ltd. The perpetual securities have a rolling 30-year maturity and callable after five years, subject to prior approval from regulatory authorities in Korea. The net proceeds of the issuance will be used for general corporate purposes. The rating on the securities is subject to the receipt of final documentation.

Key Takeaways:

  • The A3(hyb) rating on the junior subordinated capital securities is positioned two notches below Hanwha Life's A1 insurance financial strength rating (IFSR), reflecting their direct, unsecured, and subordinated obligations.
  • The hybrid features of the securities, including optional coupon cancellation mechanisms and a 30-year rolling maturity, qualify for partial equity credit under Moody's debt equity continuum.
  • The junior subordinated capital securities issuance will strengthen Hanwha Life's regulatory solvency position under the Korea Insurance Capital Standards (K-ICS).
  • Hanwha Life's pro-forma adjusted financial leverage and earnings coverage are expected to remain within Moody's expectations for the insurer's rating level.
  • The insurer's K-ICS ratio was 163.7% at the end of 2024, indicating a solid capitalization on an economic basis.
  • Moody's assessment of the insurer's capitalization as solid on an economic basis, despite the issuance of the securities, is due to the insurer's ability to maintain a healthy balance sheet.
  • The insurer's largest effective shareholder is Hanwha Group and its affiliates, which may impact its ratings in the future.

Statistics:

  • Hanwha Life's consolidated total assets: KRW165.1 trillion (as of 31 March 2025)
  • Hanwha Life's consolidated shareholders' equity: KRW14.0 trillion (as of 31 March 2025)
  • Hanwha Life's K-ICS ratio: 163.7% (at the end of 2024)
  • Moody's adjusted financial leverage threshold for an upgrade/downgrade: 30% (consistent exceedance may lead to a downgrade)

Sources:

  • Moody's Rating Symbols and Definitions
  • Moody's Life Insurers methodology published in April 2024 (available at [www.moodys.com](http://www.moodys.com))
  • Hanwha Life Insurance Co., Ltd.'s financial statements (as of 31 March 2025)