AM Best affirms credit ratings of Fubon Insurance Vietnam

KUALA LUMPUR, Dec 16 (Bernama) -- AM Best has affirmed the financial strength rating of B++ (Good) and the long-term issuer credit rating of “bbb+” (Good) of Vietnam’s Fubon Insurance Vietnam Co Ltd (Fubon Vietnam).

AM Best said in a statement that the credit ratings (ratings) which have a stable outlook reflect Fubon Vietnam’s balance sheet strength, which AM Best assessed as strong, as well as its adequate operating performance, limited business profile, and appropriate enterprise risk management.

“The ratings also factor in the rating enhancement from its parent company, Fubon Insurance Co Ltd (Fubon Insurance), Taiwan,” it said.

The rating agency said the company’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level over the medium term, as measured by Best’s Capital Adequacy Ratio.

Other favourable balance sheet strength considerations include a low net underwriting leverage ratio and conservative investment portfolio consisting of cash and term deposits, indicating a strong liquidity position.

In addition, AM Best views Fubon Vietnam as having good financial flexibility, supported by its immediate parent, Fubon Insurance, and considers the company’s high third-party reinsurance usage and dependence as an off-setting balance sheet strength factor, albeit that reinsurance counterparty risks are mitigated by reinsurance assets of typically good credit quality.

AM Best assessed Fubon Vietnam’s business profile as limited. Fubon Vietnam is a small-size, non-life insurer in Vietnam, with a market share of approximately one per cent, as measured by 2021 gross written premium.

Although Fubon Vietnam is considered a small size company within Vietnam, it has a good market position in its core business segment of property insurance.

The company derives a significant proportion of business from Taiwan corporations within its domestic market, with its business profile benefiting from the brand recognition of its parent company.

-- BERNAMA