THAILAND’S ASIAN RE CREDIT RATINGS UPGRADED - AM BEST

KUALA LUMPUR, June 3 (Bernama) -- Global credit rating agency, AM Best has upgraded the financial strength rating to B++ (Good) from B+ (Good) and the long-term issuer credit rating to “bbb” (Good) from “bbb-” (Good) of Thailand’s Asian Reinsurance Corporation (Asian Re).

The outlook of these credit ratings (ratings) has been revised to stable from positive, reflecting Asian Re’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

AM Best in a statement said the rating upgrades reflected Asian Re’s sustained improvement in operating performance in recent years, evidenced by a return-on-equity ratio of 9.4 per cent in 2024, and it has achieved positive operating results in four of the last five years.

The company’s investment returns, arising mainly from interest income, have consistently supported operating earnings. Prospectively, AM Best expects Asian Re’s operating performance to be supported by sound underwriting profitability and robust investment returns.

Asian Re’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2024, as measured by Best’s Capital Adequacy Ratio, and is expected to remain at that level over the medium term.

Notwithstanding, the company is viewed to have a relatively modest absolute capital base of US$76 million at year-end 2024, as compared with regional reinsurance peers, which increases the sensitivity of its balance sheet to shock events. (US$1=RM4.21)

AM Best views Asian Re’s business profile as limited, reflecting its position as a regional non-life reinsurer, with a modest-sized gross premium base of US$26 million in 2024, in which the company writes treaty and facultative business in Asia, the Middle East and Africa.

Despite persistent market and regulatory challenges in some of the markets where it operates, Asian Re is expected to continue to implement several strategic initiatives and business partnerships that are aimed at expanding its underwriting portfolio and market presence over the medium term.

-- BERNAMA