[Edaily Marketin Reporter LEE GEON-EOM ] Korea Ratings (Korea Credit Rating Agency) announced on the 13th that it has maintained the credit rating of Lotte Property & Casualty Insurance’s ( LotteNon-LifeInsurance(000400)) subordinated bonds at BBB+ and its hybrid capital securities at BBB, while changing the outlook from “Negative” to “Under Review for Upgrade.”

Being placed on “Review for Upgrade” indicates a high likelihood of a credit rating upgrade in the near term. This move is attributed to the fact that uncertainty surrounding the sale of shares has been largely resolved, as the largest shareholder, BigTura, has agreed to sell its stake to ShinhanFinancialGroup Co.,Ltd.

Earlier that day, BigTura—a special purpose vehicle established by JKL Partners—signed a share purchase agreement (SPA) to sell its 77.04% stake in LotteNon-LifeInsurance to ShinhanFinancialGroup Co.,Ltd. The transaction price is 693.3 billion won, and the deal is expected to close following approval of the change in major shareholder from the Financial Services Commission.

In May, Han Shin Rating assigned a “negative” outlook to LotteNon-LifeInsurance’s credit rating, citing volatility related to the implementation of its business improvement plan, weak profitability and capital adequacy, and limited capital management tools. LotteNon-LifeInsurance received conditional approval for the business improvement plan it submitted on May 27 in response to the financial authorities’ request and has been implementing it for one year and six months.

Chae Young-seo, a senior analyst at Han Shin Rating, stated, “If the acquisition process proceeds smoothly and ShinhanFinancialGroup Co.,Ltd. becomes the largest shareholder, capital adequacy and profitability could improve through capital injections by the major shareholder and adjustments to product sales strategies leveraging sales channels and the customer base.” He added, “The company’s ability to comply with regulations related to the Basic Capital Solvency Ratio, which will be introduced in the future, could also improve.”

Whether the possibility of support from the parent group is reflected is also cited as a variable for the rating upgrade. The existing credit rating for LotteNon-LifeInsurance did not reflect the possibility of support from the parent group in the event of a crisis. Han Shin Rating judged that, if the company becomes a subsidiary of ShinhanFinancialGroup Co.,Ltd., the possibility of support in such a situation could be recognized, considering the differences in creditworthiness and scale between the two companies, reputational risk as a financial holding company, and potential operational synergies.

LotteNon-LifeInsurance’s net income on a standalone basis increased from 24.2 billion won in 2024 to 51.3 billion won in 2025, but the company slipped into the red in the first half of this year, posting a net loss of 18.5 billion won. In the same period last year, it had recorded a net profit of 47.5 billion won.

The solvency ratio (K-ICS) rose slightly from 126.1% at the end of 2025 to 129.7% at the end of June 2026. Under the transitional measures, it rose from 159.5% to 161.9% over the same period.

Analyst Chae stated, “We plan to monitor the progress of the transaction, as well as the impact of capital increases and changes in business strategy following the incorporation of ShinhanFinancialGroup Co.,Ltd.’s subsidiaries, and reflect these factors in the credit rating.”