Bao Minh Insurance Corporation Credit Ratings affirmed - AM Best

KUALA LUMPUR, Dec 13 -- AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of ‘bbb’ (Good) of Bao Minh Insurance Corporation (BMI) Vietnam.

The outlook of these Credit Ratings (ratings) is stable, according to a statement.

The ratings reflect BMI’s balance sheet strength, which AM Best assesses as strong, 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 (SCIC), which is the sovereign wealth fund of Vietnam.

BMI’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation that is expected to remain at the strongest level over the 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. AM Best views BMI’s investment portfolio to be of moderate risk.

Whilst the majority of investments are allocated toward term deposits, the company maintains a portion of its investments in higher risk assets including non-rated corporate bonds, real estate, a joint venture and other equity investments.

AM Best views the company’s operating performance as adequate, as demonstrated by a five-year average return-on-equity ratio of 8.3 per cent (2016-2020). BMI has generated underwriting profits consistently in recent years, although its high expense ratio continues to be an offsetting factor to the company’s underwriting performance.

BMI’s business profile benefits from a level of business referral from its majority shareholder, SCIC, albeit a divestiture by this shareholder is expected over the near to medium term.

More details at www.ambest.com.

-- BERNAMA