AM Best affirms credit ratings of Vietnam’s Bao Minh Insurance

KUALA LUMPUR, Dec 22 (Bernama) -- AM Best has affirmed Vietnam-based Bao Minh Insurance Corporation’s (BMI) financial strength rating of “B++” (Good) and the long-term issuer credit rating of “bbb” (Good).

The credit rating agency said the ratings, which have a stable outlook, reflect BMI’s balance sheet strength as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

“The ratings also factor in a neutral impact from the company’s majority ownership by the State Capital Investment Corporation, which is the sovereign wealth fund of Vietnam,” AM Best said in a statement.

It said BMI’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2021 and is expected to remain at this level over the near to medium term, as measured by Best’s Capital Adequacy Ratio.

Capital adequacy remains sufficient to support planned business growth despite limited capital generation over recent years.

In addition, AM Best viewed BMI’s investment portfolio to be of moderate risk with the majority of it allocated toward term deposits and the remainder held in non-rated corporate bonds, equity investments including a joint venture, and real estate.

According to the rating agency, BMI maintains a basic approach to asset liability management despite some exposure to longer-duration products within its business mix.

AM Best stated that BMI has moderate reinsurance dependence to support its underwriting of large limit risks and help manage catastrophe exposure accumulation.

Its business profile was assessed by AM Best as neutral and the company is ranked as the fourth-largest non-life insurer in Vietnam based on 2021 direct premiums.

The company’s underwriting portfolio is diversified by line of business, although the company has a single-market concentration in Vietnam.

-- BERNAMA