AM Best affirms Credit Ratings of Vietnam’s PVI Re

KUALA LUMPUR, Feb 24 (Bernama) -- AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb” (Good) of Vietnam’s PVI Reinsurance Joint-Stock Corporation (PVI Re).

In a statement, AM Best said the outlook of these Credit Ratings (ratings) was stable.

The ratings reflect PVI Re’s balance sheet strength, which AM Best assessed as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management, in addition to the rating enhancement from HDI Haftpflichtverband der Deutschen Industrie V.a.G.

PVI Re’s strong balance sheet strength is underpinned by its risk-adjusted capitalisation at the very strong level as of year-end 2021, as measured by Best’s Capital Adequacy Ratio(BCAR).

Capital adequacy is expected to have declined during 2022, driven by high dividend payouts and increasing capital requirements arising from business growth and rising equity investment risk.

However, the company's BCAR is projected to recover to the strongest level following a planned capital injection in the first quarter of 2023.

PVI Re has demonstrated a track record of strong operating performance, as evidenced by a five-year average return on equity ratio of 16 per cent (2017-2021), and the company is expected to maintain its strong profitability in 2022.

The company has generated consistently robust underwriting profits, supported by affiliated domestic business, particularly in the commercial and industrial lines.

PVI Re is one of the two domestic reinsurers in Vietnam, with a significant volume of business ceded by its affiliated company, PVI Insurance Corporation, and has a moderate business concentration in catastrophe-exposed property and engineering lines.

-- BERNAMA