THAILAND’S THAIRE LIFE CREDIT RATINGS WITHDRAWN - AM BEST

KUALA LUMPUR, July 12 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of B++ (Good) and the long-term issuer credit rating of “bbb+” (Good) of Thailand’s Thaire Life Assurance Public Company Limited (Thaire Life).

These credit ratings (ratings) which have a stable outlook reflected Thaire Life’s balance sheet strength, which AM Best assessed as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

Concurrently, AM Best in a statement said it has withdrawn these ratings as the company has requested to no longer participate in the credit rating agency’s interactive rating process.

Thaire Life’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which remained at the strongest level at fiscal year-end 2023, as measured by Best’s Capital Adequacy Ratio.

The rating agency considers the company to have a moderate risk investment portfolio given its exposure to higher-risk asset classes of equities and mutual funds, although this is in part mitigated by a good level of overall portfolio diversification.

Partially offsetting balance sheet strength factors include the company’s high dividend payout ratio over recent years, which has constrained growth in its capital and surplus.

AM Best views Thaire Life’s operating performance as adequate, with a five-year average return-on-equity ratio of 8.7 per cent (2019-2023), as underwriting margins have thinned over time due to business growth in the less profitable health reinsurance notwithstanding that the company has generated consistent underwriting profits over the past five years.

In addition, the company’s underwriting performance in recent periods was impacted negatively by medical inflation and higher medical insurance utilisation and is expected to remain constrained over the near term.

With a business profile considered to be neutral, Thaire Life is the only domestic life reinsurer in Thailand, and it maintains long-standing relationships with key cedants. Future business expansion is expected to be supported by new product development initiatives, strategic business partnerships and distribution channel diversification.

-- BERNAMA