Fitch Ratings raised Hanwha Life Insurance's (KRX:088350) insurer financial strength rating to A+ (Strong) from A (Strong) and its long-term issuer default rating to A from A-, according to a Thursday release.

The upgrade considers the South Korea-based life insurer's "strong" capital position, supported by a large contractual service margin (CSM) and strategic capital securities instruments, S&P said.

The rating agency pointed to a drop in the Korean Insurance Capital Standard (K-ICS) ratio to 163.7% in 2024 from 183.8% in the preceding year, but said it still exceeded the 100% floor.

The ratings also reflect the insurer's enhanced financial metrics, driven by a stable release of its CSM from an accumulation of 9.1 trillion won, as well as its "favorable" company profile.

The company's new business CSM further exceeded 2.1 trillion won in 2024 amid a drive for high-margin protection-type products, S&P said.

The rating agency expects the company's healthy insurance profit to offset fluctuating earnings from investments.

Meanwhile, the company's favorable profile stems from its strong brand franchise, bolstered distribution capacity and large operating scale compared to Korean peers, the rating agency said.

Fitch also considered the company's manageable risky-asset portfolio and proactive asset-liability management (ALM) in its assessment.

Changes in the company's capital levels or profitability as reflected in its return on equity could trigger future rating actions, S&P said.