Hanwha Life Insurance Issuer Summary

Report date: 2026-05-14
Issuer: Hanwha Life Insurance Co., Ltd.
Ticker: HLINSU
Sector: Korea life insurance
Primary credit focus: Issuer credit quality; K-ICS capital adequacy as a Korean life insurer; CSM and insurance earnings under IFRS 17; ranking, call risk and distribution-suspension risk of HLINSU Tier II / hybrid capital securities

1. Business Snapshot and Recent Developments

Hanwha Life Insurance Co., Ltd. (“Hanwha Life” or “the company”) is a major issuer in the Korean life insurance market. It was founded in 1946 as Korea’s first life insurer and has been an insurance operating company under Hanwha Group since 2002. As of end-December 2025, its standalone total assets were KRW 125.8 trillion according to the company’s official Financial Highlights. Its long operating history, major brand, shift in product mix toward protection-type insurance, distribution capability centred on Hanwha Life Financial Service, domestic and international ratings, and capital-market access support the issuer credit profile.

This issuer should not be viewed simplistically as “safe because it is a highly rated major life insurer.” CSM under IFRS 17, K-ICS capital, ALM and security structure need to be assessed together. The expansion of protection-type insurance can support CSM generation, but future earnings can be eroded if medical utilisation, claims ratios, lapse behaviour, sales quality or assumption changes deteriorate. The investment portfolio is also sensitive to interest rates, credit spreads, foreign exchange, hedging and the valuation of overseas assets.

In FY2025, consolidated net income remained high at KRW 836.3 billion, while standalone net income declined to KRW 313.3 billion. The decline at the standalone level was attributed to adverse claims experience from increased medical utilisation and the reversal of the prior year’s gains related to asset securitisation. In Q1 2026, consolidated net income improved to KRW 381.6 billion, up 29% year on year. However, it is too early to infer a structural credit improvement from one quarter’s recovery. Insurance service results, investment results, subsidiary earnings, K-ICS and the quality of CSM need to be monitored further.

The core of the business strategy is the shift toward protection-type insurance. In 2025, protection-type premiums were KRW 10.0869 trillion, accounting for 51.0% of total premiums, while the share of savings-type premiums declined to 25.0%. This is consistent with improving profitability under IFRS 17, but it also increases sensitivity to future claims ratios, lapses, acquisition costs, complaints, product design and assumption changes for medical / health protection and whole-life products.

From a capital and rating perspective, the key figures are the FY2025-end K-ICS ratio of 157% and the ALM duration gap of 0.08 years. A 157% ratio is above the regulatory minimum, but it is difficult to characterise it as an exceptionally thick buffer for a highly rated major life insurer. The company’s official Credit Rating page shows AAA ratings from three domestic agencies, Moody’s A1, Fitch A+ and S&P A, with Moody’s and Fitch announcing upgrades in May 2025. However, ratings are reference points for the insurer’s financial strength and do not eliminate distribution-suspension, call-extension, subordination or loss-absorption risk in HLINSU Tier II / hybrid capital securities.

The HLINSU 2025 Tier II Subordinated Capital Securities are particularly prone to investor misunderstanding. According to the Offering Circular dated 16 June 2025, the company issued US$1.0 billion of 6.300% Tier II Subordinated Capital Securities. The first reset date is 24 June 2030, the Step-Up Date is 24 June 2035, and the Initial Issuer Redemption Date is 24 June 2055. Distributions may be cancelled at the issuer’s discretion or upon a Capital Deficiency Event, and cancelled distributions are non-cumulative. A Capital Deficiency Event should not be read simply as a breach of a K-ICS threshold; it should be understood primarily as a regulatory event, such as designation as an insolvent financial institution, management improvement measures by the FSC or other authorities, or emergency measures. Optional redemption also depends on prior approval from the FSS or relevant regulatory authority and on capital / solvency conditions under insurance regulation. The securities should therefore not be treated like ordinary senior bonds or instruments that are certain to be called after five years.

The key starting points are summarised below.

2. Korean Life Insurance Industry Context

The Korean life insurance market has long-term demand drivers from population ageing, demand for medical and health protection, retirement preparation and distribution-channel restructuring. At the same time, it is strongly affected by slowing growth as a mature market, distribution competition, rising medical utilisation, interest-rate / foreign-exchange / credit-spread volatility, IFRS 17 and K-ICS. The credit quality of a life insurer cannot be judged from the size of premium income alone. The profitability of long-term policies, CSM, asset-liability management, regulatory capital, policyholder behaviour and sales quality need to be assessed together.

Under IFRS 17 and K-ICS, Hanwha Life’s shift toward protection-type insurance, CSM generation and K-ICS ratio of 157% should be analysed as one package. CSM is a stock of future earnings, but it is not cash, and it can decline due to claims ratios, lapses, expenses, mortality / morbidity, discount rates and assumption changes. K-ICS also moves through interest rates, credit spreads, overseas assets, foreign exchange, hedging and insurance risk. Therefore, the fact that new business CSM exceeded KRW 2 trillion for the third consecutive year and that protection-type premiums accounted for 51.0% of total premiums is positive, but the quality of future earnings and capital headroom need to be monitored continuously.

In an industry comparison, it is natural to view Hanwha Life as one of the leading life insurers alongside Kyobo Life and Samsung Life. Unlike midsized life insurers or insurers undergoing restructuring, it has a long history, large asset base, distribution power, high official ratings and access to foreign-currency capital markets. At the same time, the strength of the issuer credit should not be confused with senior-bond-like safety in HLINSU Tier II / hybrid capital securities. Hanwha Life is a strong major life insurer, but it is a credit where misunderstanding is easy unless insurance liabilities, K-ICS, CSM and capital-security terms are examined carefully.

3. Franchise, Product Mix and Distribution

Hanwha Life’s franchise is supported by its long history in the Korean life insurance market, the Hanwha brand, nationwide customer base, distribution channels, product shift toward protection-type insurance and overseas expansion. The official website states that the company was founded in 1946 as Korea’s first life insurer, surpassed KRW 100 trillion in total assets in 2016, launched Hanwha Life Financial Service in 2021, obtained AAA ratings from the three major domestic rating agencies in 2025, and became the first Korean insurer to enter overseas banking through the acquisition of Nobu Bank in Indonesia. This indicates a move from a purely traditional life insurer toward a broader financial group covering distribution, digital, overseas, banking and securities businesses.

However, the starting point for credit analysis remains the life insurance business. An insurer’s franchise is not only brand recognition; it is the ability to sell long-term policies, retain premium payments from policyholders, pay claims and benefits, manage investment assets and maintain regulatory capital. For Hanwha Life, Hanwha Life Financial Service has become a central component of this franchise. According to Korea JoongAng Daily, Hanwha Life Financial Service’s 2025 revenue reached KRW 2.44 trillion, a substantial increase from KRW 328 billion in 2021. The same article reported that the number of sales agents rose from 19,000 at end-2021 to 27,000 at end-2025, and that the number of sellers, including affiliated agencies, was expected to exceed 40,000 in 2026. Distribution power has a significant effect on CSM generation and market-share retention.

The product-mix shift is central to the company’s credit story. In 2025, protection-type premiums were KRW 10.0869 trillion, up 20.9% year on year, and accounted for 51.0% of total premiums. Savings-type premiums were KRW 4.9385 trillion, down 16.7% year on year, and accounted for 25.0%. This is consistent with a direction that should improve future earnings and capital efficiency for an insurer. Under IFRS 17, protection-type and health insurance products can generate high CSM multiples and serve as a source of future insurance service results. However, medical and health protection products are sensitive to treatment behaviour, medical costs, benefit design, morbidity, customer behaviour and the quality of sales explanations. Growth in sales volume and improvement in future profitability may appear similar, but they are different questions.

The product-mix table is as follows.

The role of Hanwha Life Financial Service is also important when comparing the company with Kyobo Life and Samsung Life. Kyobo Life has a traditional tied-agent force and a major brand. Hanwha Life’s distinguishing feature is that it has substantially expanded its manufacturing-and-distribution-separated GA subsidiary. This improves distribution scalability and speed of product rollout, but it also makes sales-agent management and sales quality credit issues. Insurance policies do not end with profit recognition at the point of sale. CSM becomes quality earnings only when policies remain in force, claims ratios stay within assumptions and acquisition commissions are absorbed.

Overseas and non-insurance businesses have both franchise-expansion and risk-expansion characteristics. The official subsidiaries page lists Hanwha General Insurance, Hanwha Asset Management, Hanwha Life Financial Service, Hanwha Savings Bank, Hanwha Life Insurance Vietnam, PT. Hanwha Life Insurance Indonesia and others. FY2025 reporting also indicated that the acquisitions of Nobu Bank and Velocity Securities partly contributed to consolidated earnings. These businesses may broaden non-insurance financial revenue, customer touchpoints and geographic diversification. At the same time, non-life insurance, asset management, savings banking, securities and overseas banking have credit risks, market risks, regulation, capital allocation and governance issues that differ from life insurance. The shift toward an integrated financial group is not only a credit positive; it may also dilute the low-risk nature of the standalone life insurance business.

The main subsidiaries are as follows.

As a franchise assessment, Hanwha Life is strong as a leading life insurer. Its long history, brand, distribution network, ratings and market access support policyholder confidence and capital-raising capacity. At the same time, the rapid shift toward protection-type insurance, GA expansion and overseas / banking / securities expansion require verification of future earnings and capital allocation. Credit investors should not read sales-volume growth directly as credit improvement, but should verify how it is translating into insurance results, CSM, K-ICS and ALM.

4. Financial Profile and Analysis

Hanwha Life’s financial profile needs to be read separately on a standalone and consolidated basis. The standalone entity is the core insurance operating company and the issuer of the HLINSU securities. The consolidated group shows the earnings capacity of a broader financial group that includes the GA, non-life insurer, asset manager, savings bank, overseas life insurers, and overseas banking / securities businesses. In FY2025, consolidated profit remained high, while standalone net income fell sharply. This difference makes the company’s credit analysis less straightforward.

The key standalone indicators from the official Financial Highlights are as follows.

The first point from this table is that the scale of assets and capital remains large. FY2025 standalone total assets of KRW 125.8 trillion and total equity of KRW 12.5 trillion are not the profile of a weak small or midsized insurer. Investment assets, capital, regulatory supervision and rating-agency assessments, all relative to insurance liabilities, support the near-term issuer credit profile. The second point is net-income volatility. Standalone net income declined from KRW 721 billion in FY2024 to KRW 313 billion in FY2025. This constrains the assessment of internal capital generation at the standalone entity.

On a consolidated basis, FY2025 net income was reported at KRW 836.3 billion, substantially higher than the standalone figure. Contributions from the GA subsidiary, non-life insurer, asset manager, securities business and overseas subsidiaries supported consolidated earnings. Consolidated diversification can be credit positive. In particular, the monetisation of Hanwha Life Financial Service, earnings contributions from overseas subsidiaries, and the consolidation impact of Nobu Bank and Velocity Securities create earnings sources that are not solely dependent on the standalone life insurer. However, as a bond investor in an insurance issuer, it is necessary to distinguish how much of consolidated earnings remains as capital at Hanwha Life on a standalone basis, contributes to insurance regulatory capital, and translates into distribution and redemption capacity for HLINSU securities.

The key FY2025 operating and capital indicators are as follows.

A credit strength is that earnings sources are not confined to the standalone insurance business. A life insurer can more easily absorb single-year adverse claims experience if it has earnings from distribution subsidiaries, non-life insurance, asset management and overseas businesses in addition to insurance and investment results. Hanwha Life’s FY2025 consolidated earnings and Q1 2026 earnings indicate that this diversification is functioning. However, the core of life-insurance credit remains the ability to pay insurance liabilities, regulatory capital and ALM. Even if subsidiary earnings are present, HLINSU investors’ risk increases if K-ICS declines, standalone insurance results deteriorate and regulatory conditions for capital securities tighten.

The decline in FY2025 standalone earnings needs to be interpreted carefully. Reports cited an industry-wide increase in medical utilisation, a deterioration in the gap between expected and actual claims, and the reversal of prior-year gains on asset securitisation as factors behind the decline in standalone net income. Increased medical utilisation may prove to be a one-off fluctuation, but if linked to the expansion of health and medical protection sales, it can become a structural claims-ratio risk. The reversal of asset-securitisation gains is an accounting base effect that distorts single-year comparisons, but it also points to earnings volatility when profits rely on investment gains.

The Q1 2026 improvement is positive. Consolidated net income of KRW 381.6 billion, operating profit of KRW 480.8 billion and revenue of KRW 9.98 trillion provide comfort after the FY2025 standalone earnings decline. However, the Q1 figures are closer to preliminary earnings data, and the quality of the improvement cannot yet be fully assessed without simultaneously reviewing K-ICS, CSM, insurance results, investment results, subsidiary contributions and claims ratios. From a credit-investor perspective, Q1 2026 should be viewed as “one piece of evidence of improvement,” not as proof that structural earnings improvement has begun.

Overall, Hanwha Life’s financial profile has sufficient scale and earnings for a highly rated major life insurer, but given the FY2025 standalone earnings decline, K-ICS of 157%, increased medical utilisation and the significance of investment results / subsidiary contributions, it is strong but not unconditionally thick. To assess internal capital generation, future insurance service results, CSM release, the quality of K-ICS, and capital consumption at overseas / non-insurance subsidiaries need to be monitored.

5. Insurance Liabilities, Investments and ALM

For Hanwha Life as a life insurer, credit analysis needs to consider insurance liabilities, CSM, investment assets, ALM and K-ICS together. The insurer’s total assets are large, but most of those assets correspond to long-term insurance and investment contract liabilities owed to policyholders. The question is therefore not simply that “total assets are KRW 126 trillion,” but what liabilities those assets support, how much remains as free capital, and how much can be sold, pledged or liquefied under stress.

CSM is one of the most important indicators in the company’s current credit story. FY2025 new business CSM was KRW 2.0663 trillion, exceeding KRW 2 trillion for the third consecutive year. The CSM stock was KRW 8.7137 trillion. This indicates that the product shift toward protection-type insurance and the company’s distribution power are accumulating a stock of future earnings. It is also consistent with Moody’s May 2025 upgrade, which recognised the expansion of protection-type product sales and distribution capability through the GA subsidiary.

However, CSM has limitations. CSM is an estimate of future earnings, not a pile of cash. Its value can move if assumptions for claims ratios, lapses, expenses, mortality / morbidity, discount rates, risk adjustment, product mix, acquisition costs and reinsurance change. The sharp increase in Hanwha Life’s protection-type premiums and the increased weighting of health insurance and long-term-payment whole-life insurance are effective for building CSM. However, given the explanation that adverse experience from increased medical utilisation depressed FY2025 standalone earnings, management of future claims ratios is the most important credit monitoring item.

K-ICS is 157%. From an issuer-credit perspective, this is adequate but difficult to describe as an overwhelmingly thick buffer. It is well above the 100% regulatory minimum and does not indicate capital insufficiency in a normal environment. However, given the high rating of a leading life insurer, capital headroom requires ongoing confirmation. Moody’s public summary also noted that the K-ICS ratio declined to 163.7% at end-2024, while assessing that the protection-type product mix and capital-securities issuance support capital.

The ALM duration gap of 0.08 years is positive information. A life insurer’s capital is heavily affected by the duration gap between assets and liabilities. If sufficient long-term bonds or long-term assets are held against long-term insurance liabilities, capital volatility from interest-rate movements is easier to contain. Fitch’s public summary also reportedly recognised rebalancing toward long-term bonds to prepare for declining interest rates and active ALM. However, this report has not fully reviewed detailed asset and liability duration tables, interest-rate sensitivity, credit-spread sensitivity, hedging policy, or the currency / rating mix of overseas assets. The duration gap of 0.08 years should therefore be treated as an important support, but not as evidence that ALM risk has disappeared.

The quality of the investment assets also has unresolved areas. Moody’s public summary stated that Hanwha Life’s adjusted high-risk asset ratio rose to 123.0% at end-2024 from 97.4% at end-2023, due to a decline in shareholders’ equity and an increase in high-risk assets. The company is advancing investment management centred on long-term bonds as a major insurer, but if overseas assets, real estate, alternative investments, equities, affiliates, securities and banking subsidiaries increase, credit risk and market risk also rise. Investment income supports an insurer’s earnings, but it also affects K-ICS and OCI.

On the liability side, the shift toward protection-type insurance can be both positive and negative. The decline in the share of savings-type insurance can reduce guaranteed-rate and capital burdens. On the other hand, protection-type insurance is sensitive to experience variance in medical / health benefits, complex product design, customer complaints, sales explanations and long-term persistency. Even if CSM appears high at the time of sale, future earnings will be reduced if actual claims exceed assumptions. Because the company has strong distribution power through the GA channel, both the volume and quality of sales need to be monitored.

Without rushing to a credit conclusion, Hanwha Life’s insurance-liability, ALM and capital profile can be described as “adequately managed as a leading life insurer, but at a stage where the combination of 157% K-ICS and rapid expansion of protection-type insurance needs continued monitoring.” CSM and the ALM gap are clear supports. Protection-type insurance and GA distribution power are engines of profitability improvement. At the same time, increased medical utilisation, lower K-ICS, high-risk assets, greater capital-securities issuance and overseas / non-insurance subsidiary expansion are constraints embedded in the same story.

6. Ownership, Group Structure and Structural Considerations for Bondholders

Hanwha Life’s shareholder structure is an important reference point for issuer credit quality. According to the official Shareholding Structure, as of 31 December 2025, the number of issued shares was 868,530,000, with Hanwha Corporation holding 43.24%, treasury shares 13.49%, individual investors and others 12.84%, foreign institutional investors 10.2%, KDIC 10.0%, domestic corporations 8.48%, and Hanwha Galleria Timeworld 1.75%. Hanwha Corporation’s position as the largest shareholder indicates that the company is one of the core financial entities within Hanwha Group.

However, Hanwha Corporation’s ownership and the Hanwha Group brand should not be confused with debt guarantees. HLINSU securities issued by Hanwha Life are obligations of the insurance company itself, and within the scope reviewed they are not explicitly guaranteed by Hanwha Corporation or Hanwha Group. Group brand, strategic importance and reputational risk may increase support expectations, but they are separate from legal payment obligations. Under stress at an insurer, policyholder protection, regulators, senior creditors and the ranking of capital securities determine priorities.

KDIC’s 10.0% ownership also should not be confused with a government guarantee. The KDIC stake reflects historical and institutional background, but it does not constitute a government guarantee of HLINSU securities or the company’s obligations. Domestic AAA ratings and S&P A, Moody’s A1 and Fitch A+ are assessments of insurance financial strength and issuer credit, not guarantees of principal or interest by the government or parent company.

The subsidiary structure has two sides for credit. Hanwha General Insurance, Hanwha Asset Management, Hanwha Life Financial Service, Hanwha Savings Bank, overseas life insurers, Nobu Bank, Velocity Securities and others expand earnings sources and customer touchpoints. Hanwha Life Financial Service, in particular, has a central role in protection-type sales and CSM generation. At the same time, non-life insurance, asset management, savings banking, securities and overseas banking carry credit risks and regulatory capital needs that differ from the standalone life insurance business. Even if consolidated earnings increase, capital allocation at Hanwha Life can become more complex if subsidiaries require capital.

For HLINSU investors, the most important issue is the separation between issuer credit and security hierarchy. A high insurance financial strength rating indicates the insurer’s ability to pay. However, Tier II / hybrid capital securities rank below senior debt and are exposed to distribution suspension, optional-redemption restrictions, principal loss and regulatory discretion. For insurers, policyholder protection and maintenance of regulatory capital are prioritised under stress. Therefore, even when issued by the same Hanwha Life, senior debt, Tier II and hybrid capital have different risks.

The structural framework is as follows. First, policyholders and regulators are the most important stakeholders. Second, the ranking difference between ordinary issuer obligations and capital securities needs to be distinguished. Third, the relationship with Hanwha Group can be treated as support expectation, but not as a guarantee. Fourth, subsidiary expansion creates both earnings diversification and capital complexity. Fifth, the assessment of HLINSU needs to consider not only issuer strength, but also K-ICS, FSS approval, optional-redemption conditions and distribution-suspension provisions.

7. HLINSU Capital Securities, Funding and Liquidity

For investors looking at the HLINSU ticker, the main issue is not only Hanwha Life’s issuer credit, but also the structure of its foreign-currency Tier II / hybrid capital securities. The US$1.0 billion 6.300% Tier II Subordinated Capital Securities issued in June 2025 are an important transaction demonstrating the company’s access to international capital markets, while exposing investors to risks that differ from senior debt.

The key terms of the 2025 securities are as follows.

The first point about this security is that distributions are not the same as ordinary corporate-bond interest. Under the Offering Circular, the issuer may cancel distributions at its discretion in certain circumstances, and distributions may be mandatorily cancelled upon a Capital Deficiency Event. A Capital Deficiency Event should be read primarily as a regulatory event, such as designation as an insolvent financial institution, management improvement recommendations / requirements / orders by the FSC or other authorities, or emergency measures, rather than simply a decline in the K-ICS ratio. Cancelled distributions are non-cumulative and do not revive as future payment obligations.

The second point is that optional redemption is not determined solely by the company’s free liquidity-management decision. The 2025 securities may be optionally redeemed on or after the Initial Reset Date, but prior approval from the FSS or relevant regulatory authority and capital / solvency conditions under insurance regulation are involved. The conditions indicated at issuance include, for example, a post-redemption Solvency Margin Ratio of at least 130%, or at least 100% with replacement into equivalent or higher-quality capital. In other words, even if the market expects a call at the Initial Reset Date, the issuer may not call, or may not be able to call, if K-ICS or capital-market conditions are weak.

The third point is long-extension risk. The Initial Issuer Redemption Date is 24 June 2055, and if the securities are not redeemed, they have a mechanism under which they are automatically extended for 30 years. In practice, the market will focus on the first reset in 2030 and the step-up in 2035, but the contractual risk extends much further. In capital securities, the expectation that the instrument will be called for economic reasons can form part of an investment view, but credit analysis should distinguish maturity, call and extension.

The fourth point is that the issuer already uses foreign-currency capital securities. In 2022, it issued US$750 million of 3.379% Tier II Subordinated Sustainability Securities due 2032, and the 2025 issuance is another large foreign-currency capital transaction. Moody’s public summary stated that large capital-securities issuance since 2024 has supported capital, while financial leverage has increased and is expected to remain in the 25%-30% range over the next 12-18 months. Capital securities support K-ICS, but from an investor perspective they also increase call, reset, distribution and subordination risk.

On liquidity, Hanwha Life has large premium income, investment assets, domestic and international capital-market access, and high domestic and international ratings. The Q1 2026 earnings improvement also indicates distance from near-term credit stress. However, insurer liquidity differs from that of ordinary corporates. Policyholder lapses, claims payments, maturity benefits, investment-asset liquidity, derivative collateral and regulatory capital restrictions can move simultaneously. For foreign-currency capital securities, US-dollar distributions, foreign exchange, hedging and refinancing costs also need to be considered.

Therefore, the practical view of HLINSU securities is that they are “investment-grade capital securities issued by a highly rated major Korean life insurer,” but also “subordinated capital instruments rather than senior debt, where investors should not over-rely on a call assumption.” The issuer credit is strong. However, given K-ICS of 157%, increased medical utilisation, financial leverage, capital-securities issuance and regulatory conditions, securityholders should require compensation not only for issuer strength but also for the risks embedded in the securities themselves.

8. Rating Agency View

Hanwha Life’s official Credit Rating page shows AAA ratings from three domestic agencies, Moody’s A1, Fitch A+ and S&P A. Ratings are important reference points supporting the company’s market position, improving profitability, ALM, distribution capability and capital-market access, but they are not substitutes for security-specific risk analysis.

In Moody’s May 2025 public summary, the insurance financial strength rating was upgraded from A2 to A1, and the subordinated capital securities rating from Baa1 to A3. The upgrade reflected expansion of protection-type product sales, distribution capability through the GA subsidiary, reduction in high-guaranteed-rate policies, brand strength, ALM and capital support from capital-securities issuance. At the same time, the decline in the K-ICS ratio to 163.7% at end-2024, financial leverage expected to remain at 25%-30%, and the high-risk asset ratio of 123.0% remain constraints. Fitch also reportedly upgraded the rating to A+ in May 2025, recognising protection-type products, profitability, ALM and distribution power.

For S&P and the three domestic rating agencies, the rating levels on the official page have been confirmed, but the full rating reports themselves have not been retained. Therefore, detailed notching, outlooks, K-ICS assessments, subordinated-security assessments and the treatment of domestic regulatory capital features should be checked directly in future updates.

The rating map is as follows.

The correct reading of the ratings is that issuer credit quality is high. However, Moody’s A3 rating on the subordinated capital securities is lower than the A1 insurance financial strength rating, and the expected security ratings in the Offering Circular for the 2025 Tier II securities are Moody’s A3 and Fitch A-. Even when the issuer is strong, capital securities have distribution-suspension, subordination, optional-redemption restriction and regulatory capital features. This rating differential should therefore always be reflected in HLINSU investment decisions.

9. Credit Positioning

Hanwha Life is positioned in the upper tier of Korean life insurers. Alongside Kyobo Life and Samsung Life, it has the brand, customer base, distribution strength, ratings, capital-market access and CSM-generation capacity of a major life insurer. It is not an issuer like Tongyang Life, where support expectations related to parent-company acquisition are central to the credit view. Hanwha Life’s own insurance franchise, distribution, products, ALM and capital management are the primary areas of assessment.

In a peer comparison, Hanwha Life is strong in distribution power, product shift, consolidated earnings and CSM. At the same time, given its FY2025 K-ICS of 157% and decline in standalone net income to KRW 313.3 billion, it is not appropriate to say that its capital ratio is always thick simply because it is a major insurer. Comparisons with Kyobo Life and Tongyang Life are limited to directional checks against existing internal reports. Since this report has not re-collected primary source materials for each peer, the public report is limited to qualitative comparison. Samsung Life may also be the top-tier benchmark, but this report does not provide a numerical comparison because primary sources have not been reviewed in detail.

The fundamental positioning is: “a highly rated major Korean life insurer with strong issuer credit quality, but a credit where HLINSU capital securities should incorporate K-ICS, call risk, distribution suspension and regulatory capital features.” Market spreads and live prices have not been reviewed, so this report does not make a rich / cheap, buy / sell or relative-value assessment.

10. Key Credit Strengths and Constraints

Hanwha Life’s credit strengths are its long history as a major Korean life insurer, standalone asset scale of about KRW 126 trillion, high domestic and international ratings, product shift toward protection-type insurance, distribution capability centred on Hanwha Life Financial Service, consolidated earnings depth and access to international capital markets. The protection-type premium share of 51.0%, new business CSM of KRW 2.0663 trillion and CSM stock of KRW 8.7137 trillion indicate the ability to generate future earnings under IFRS 17.

The constraints are the decline in FY2025 standalone net income, a K-ICS ratio of 157% that is not overly thick, future claims-ratio and sales-quality risk from increased medical utilisation and rapid expansion of protection-type insurance, financial leverage and high-risk assets, and more complex capital allocation from overseas, banking, securities and non-life insurance expansion. The issuer credit is strong, but HLINSU capital securities require separate allowance for distribution suspension, subordination, optional-redemption restrictions and long extension.

The strengths and constraints are summarised below.

11. Downside Scenarios and Monitoring Triggers

Hanwha Life’s main downside is not acute insolvency, but a scenario in which insurance results, K-ICS, investment assets and capital-security terms deteriorate at the same time. Given the high ratings, scale, distribution power, CSM and Q1 2026 earnings improvement, the probability of a large near-term deterioration in issuer credit under normal conditions is not high. However, for a life insurer, interest rates, medical utilisation, lapses, investment-asset valuations and capital-market access can move simultaneously, and when multiple shocks overlap, the valuation of HLINSU capital securities can change materially before issuer credit does.

Specifically, the main downside scenario would involve K-ICS approaching the 150% area, deterioration in claims ratios or lapses for medical / health insurance, CSM not converting into earnings as expected, and investment-asset valuation losses or hedging losses eroding capital. In addition, if Nobu Bank, Velocity Securities, the savings bank, the non-life insurer or overseas life insurers require additional capital during an economic downturn, consolidated earnings diversification could instead become a capital-allocation risk.

For HLINSU capital securities, it is important that cash-flow expectations can change even if the issuer remains a going concern. The 2025 securities may be optionally redeemed after the 2030 first reset, but FSS approval and capital conditions are required. A Capital Deficiency Event is not simply a K-ICS level, but an event related to regulatory measures, designation as an insolvent financial institution and similar matters. K-ICS should be positioned as a monitoring indicator for capital deterioration before such an event. If market conditions are poor and equivalent or higher-quality capital cannot be raised at a reasonable cost, investors need to assume the possibility of call deferral or spread widening.

The main monitoring triggers are as follows.

Upside would be a scenario where protection-type insurance sales support both insurance service results and CSM, K-ICS recovers to around or above 180%, and standalone net income recovers from the FY2025 decline. Downside would be a combination of lower K-ICS, worsening claims ratios, lower CSM quality, investment-asset valuation losses, higher financial leverage, subsidiary capital burdens and deteriorating rating outlooks.

12. Credit View and Monitoring Focus

Hanwha Life’s current credit quality can be assessed as that of a highly rated insurance credit positioned in the upper tier of Korean life insurers. Domestic AAA ratings, Moody’s A1, Fitch A+, S&P A, FY2025 standalone total assets of KRW 125.8 trillion, FY2025 consolidated net income of KRW 836.3 billion, new business CSM of KRW 2.0663 trillion, CSM stock of KRW 8.7137 trillion and Q1 2026 consolidated net income of KRW 381.6 billion support the issuer credit profile. This is an initial assessment based on official Financial Highlights, published articles and the SGX Offering Circular. Insurance service results, investment-asset breakdown, OCI, and K-ICS eligible / required capital should be rechecked in detail in the FY2025 annual report. As of 14 May 2026, the direction of credit quality is best viewed as stable to awaiting confirmation of gradual improvement. Q1 2026 earnings improvement is positive, but given the FY2025 standalone earnings decline and K-ICS of 157%, the pace of improvement should not be overestimated.

The supports for issuer credit are clear. Hanwha Life is a leading issuer in the Korean life insurance market, not a weak small or midsized insurer or a financial company undergoing restructuring. Its long operating history, brand, distribution power, high official ratings, CSM-generation capacity, ALM management and access to foreign-currency capital markets support the confidence of policyholders and bond investors. The product shift toward protection-type insurance is also consistent with improving profitability and future earnings stock under IFRS 17. The distribution model centred on Hanwha Life Financial Service is an important franchise asset that differentiates the company from other major life insurers.

The main constraints are capital and the quality of insurance earnings. K-ICS of 157% is within a safe range, but it is difficult to view as extremely thick for a highly rated major life insurer. The decline in FY2025 standalone net income leaves some caution around the earnings stability of the insurance company itself, even if increased medical utilisation and the prior-year reversal explain part of the decline. Rapid growth in protection-type insurance is positive for CSM, but it also increases future claims-ratio, lapse, sales-quality and assumption-change risks. The financial leverage and high-risk asset ratio highlighted by Moody’s are also important for capital-securities investors.

By security class, issuer credit and HLINSU capital securities should always be separated. The 2025 US$1.0 billion 6.300% Tier II Subordinated Capital Securities have non-cumulative distribution cancellation, possible mandatory distribution cancellation upon a Capital Deficiency Event, and optional redemption subject to FSS approval and capital conditions. The 2030 call should not be treated as certain merely because of the first reset date or market convention.

The monitoring focus is: first, the direction of K-ICS from 157%; second, whether protection-type insurance sales translate into insurance service results and CSM quality; third, whether the Q1 2026 improvement after the FY2025 standalone earnings decline is confirmed for the full year; fourth, whether investment assets, high-risk assets and overseas expansion avoid pressuring capital; and fifth, whether concerns emerge around distributions, refinancing or call conditions for HLINSU capital securities. If these improve together, comfort within Hanwha Life’s high-rating category would increase. Conversely, if lower K-ICS, weaker insurance results, increased medical utilisation, higher high-risk assets, subsidiary capital burdens and deteriorating rating outlooks occur at the same time, the assessment of both issuer credit and capital securities should become more conservative.

The practical conclusion at this stage is to position Hanwha Life as a “major Korean life insurer with a strong franchise and high ratings,” and to recognise sufficient resilience in the issuer credit profile, while requiring clearly higher risk compensation for HLINSU capital securities than for senior debt. Being a major life insurer is an important defensive factor, but for capital securities, pricing and investment decisions should reflect not only issuer strength but also K-ICS, distribution suspension, call optionality and regulatory capital features.

13. Short Summary & Conclusion

Hanwha Life is a highly rated major life insurer positioned in the upper tier of the Korean life insurance market. Domestic AAA ratings, Moody’s A1, Fitch A+, S&P A, the shift toward protection-type insurance, FY2025 new business CSM of KRW 2.0663 trillion and Q1 2026 earnings improvement support the issuer credit profile. At the same time, the FY2025 standalone net income decline, K-ICS of 157%, increased medical utilisation, future claims ratios from the rapid expansion of protection-type insurance, financial leverage and high-risk assets require monitoring. The issuer credit is strong, but HLINSU Tier II / hybrid capital securities are not senior debt and should be assessed separately for distribution suspension, call optionality, regulatory approval and subordination.

14. Sources

Company and primary sources

• Hanwha Life official website
  https://company.hanwhalife.com/en
• Hanwha Life official Financial Highlights
  https://company.hanwhalife.com/en/investment/financial/highlight
• Hanwha Life official Credit Rating page
  https://company.hanwhalife.com/en/investment/investor/credit-rating
• Hanwha Life official Shareholding Structure
  https://company.hanwhalife.com/en/governance/shareholders
• Hanwha Life official Subsidiaries page
  https://company.hanwhalife.com/en/governance/subsidiary
• SGX listing prospectus page, Hanwha Life US$1.0bn 6.300% Tier II Subordinated Capital Securities
  https://links.sgx.com/1.0.0/prospectus-circulars/55134
• Hanwha Life 2025 Final Offering Circular, US$1.0bn 6.300% Tier II Subordinated Capital Securities
  https://links.sgx.com/FileOpen/HLI%202025%20-%20Final%20Offering%20Circular%20.ashx?App=Prospectus&FileID=66531
• Hanwha Life 2022 Final Offering Circular, US$750m 3.379% Tier II Subordinated Sustainability Securities due 2032
  https://links.sgx.com/FileOpen/Hanwha%20Life_Final%20Offering%20Circular%20%28T2%20Sub%20Sustainability%20-%20Jan%2024_2022%29.ashx?App=Prospectus&FileID=54271

Results, rating and contextual sources

• Seoul Economic Daily, Hanwha Life FY2025 results and CSM, 2026-02-23
  https://en.sedaily.com/news/2026/02/23/hanwha-life-posts-8363-billion-won-net-profit-new-contract
• Asia Business Daily, Hanwha Life FY2025 results, CSM, K-ICS and duration gap, 2026-02-23
  https://view.asiae.co.kr/en/print.htm?idxno=2026022316282864462
• Yonhap, Hanwha Life Q1 2026 earnings, 2026-05-12
  https://en.yna.co.kr/view/AEN20260512006200320
• Seoul Economic Daily, protection insurance mix, 2026-03-25
  https://en.sedaily.com/news/2026/03/25/hanwha-lifes-protection-insurance-tops-50-percent-of
• Investing.com public summary of Moody's rating action, 2025-05-23
  https://www.investing.com/news/stock-market-news/hanwha-lifes-ifsr-upgraded-to-a1-by-moodys-ratings-outlook-stable-93CH-4062004
• Korea Times public summary of Fitch rating action, 2025-05-09
  https://www.koreatimes.co.kr/amp/business/20250509/fitch-upgrades-hanwha-lifes-credit-rating-to-a-with-stable-outlook
• Korea JoongAng Daily, Hanwha Life Financial Service sales channel article, 2026-03-26
  https://koreajoongangdaily.joins.com/news/2026-03-26/business/finance/Hanwha-Life-Insurance-revenue-jumps-more-than-sevenfold-after-separation-of-sales-channels-product-development/2554323

Unverified or pending items

• Paid Moody's, Fitch, S&P, Korea Investors Service, Korea Ratings and NICE Investors Service full rating reports were not retained. Rating discussion is based on the company official page and public summaries.
• Live bond prices, spreads, yield levels, OAS, Z-spread and relative-value comparisons were not reviewed. This report does not make a market-level rich / cheap or buy / sell call.
• Full FY2025 annual report note extraction was not completed beyond official Financial Highlights, public DART-derived reporting and the SGX offering circular. Detailed insurance service result, investment asset class, OCI, sensitivity and full K-ICS eligible / required capital tables should be refreshed in the next update.
• Detailed terms for all domestic subordinated and hybrid capital securities were not reviewed. Individual security investment requires the relevant offering documents.
• Samsung Life direct current metrics were not reviewed, so Samsung comparison is qualitative only.