Vietnam's Petrolimex Insurance Credit Ratings Affirmed - AM Best

KUALA LUMPUR, Nov 23 (Bernama) -- Global credit rating agency AM Best has affirmed Vietnam's Petrolimex Insurance Corporation (PJICO) Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good).

Additionally, AM Best has assigned the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) to PJICO.

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

In a statement, AM Best said PJICO’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level prospectively, as measured by Best’s Capital Adequacy Ratio.

At the same time, the company’s capital and surplus reported a slight decrease as a result of substantial dividend payments. However, the rating agency expects that future dividend payouts will be moderated over the medium term.

PJICO maintains a conservative investment strategy, with a majority of its investments held in cash and term deposits, in which it has a moderate 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, evidenced by a five-year weighted average return-on-equity ratio and combined ratio of 12.2 per cent and 97.1 per cent (2018-2022), with its overall earnings remain driven by a stable stream of investment income.

Underwriting profits from commercial lines including property and marine cargo businesses have benefitted typically from low net loss ratios and good reinsurance commission income.

Furthermore, AM Best also evaluates the company’s business profile as neutral. A non-life insurer based in Vietnam, PJICO’s premium mix is diversified moderately with key business lines being motor, accident and health, property, and marine cargo.

It has a wide distribution network, whereby its business is mainly sourced directly and through agencies, and the company’s profile benefits from its common branding and preferential access to cargo business arising from its largest non-majority shareholder, Vietnam National Petroleum Group.

-- BERNAMA