AM Best Withdraws Credit Ratings of Thaire Life Assurance Public Company Limited
July 11 2024 - 11:09AM
Business Wire
AM Best has affirmed the Financial Strength Rating of B++
(Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of
Thaire Life Assurance Public Company Limited (Thaire Life)
(Thailand). The outlook of these Credit Ratings (ratings) is
stable. Concurrently, AM Best has withdrawn these ratings as the
company has requested to no longer participate in AM Best’s
interactive rating process.
The ratings reflect Thaire Life’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.
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 (BCAR). AM Best 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. In addition, AM Best views the company’s modest absolute
capital base to have the potential to increase the sensitivity of
its capital adequacy to shock events, as well as to changes in
future performance.
AM Best views Thaire Life’s operating performance as adequate,
with a five-year average return-on-equity ratio of 8.7%
(2019-2023). 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. Nevertheless, Thaire Life is expected to continue growing and
diversifying its business portfolio while executing remedial
actions aimed at improving profitability. Investment income,
comprising interest and dividend income, also is expected to remain
supportive of overall earnings.
AM Best considers Thaire Life’s business profile to be neutral.
The company 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.
Ratings are communicated to rated entities prior to
publication. Unless stated otherwise, the ratings were not amended
subsequent to that communication.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best’s Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City.
For more information, visit
www.ambest.com.
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Sin Yee Chuah, CFA Senior Financial Analyst +65
6303 5022 sinyee.chuah@ambest.com Chris Lim, FCII, CFA
Associate Director, Analytics +65 6303 5018
chris.lim@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com