AM Best gives BIDV Insurance Corporation good Credit Ratings

KUALA LUMPUR, Sept 14 -- Global credit rating agency, AM Best has affirmed the Financial Strength Rating of B++ (good) and the Long-Term Issuer Credit Rating of ‘bbb’ of BIDV Insurance Corporation (BIC) Vietnam.

With a stable outlook of these Credit Ratings, it reflects BIC’s balance sheet strength, which AM Best categorises as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

According to a statement, the ratings also factor in a neutral impact from the company’s ultimate parent, the state of Vietnam.

BIC’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which AM Best expects to remain at the strongest level over the medium term.

Despite the company’s moderate dividend payout ratio over the past three years, retained earnings have remained sufficient to bolster shareholders’ equity and support business growth.

Other balance sheet considerations include the company’s reliance on reinsurance to support its underwriting capacity for large property and engineering risks, as well as to manage accumulation risks and catastrophe exposure.

AM Best assesses the company’s operating performance as adequate, as evidenced by a five-year average return-on-equity ratio of eight per cent (2015-2019). BIC’s combined ratio has trended lower over recent years, with a five-year average of 99 per cent (2015-2019).

AM Best expects prospective operating performance to remain at an adequate level; however, if the company’s underwriting performance deteriorates below a break-even position, or if robust investment returns are no longer achieved, pressure on this assessment could arise.

-- BERNAMA