Best’s News & Research Service - June 30, 2015 12:53 PM (EDT)
A.M. Best Assigns Ratings to Thaire Life Assurance Public Co., Ltd.
- June 30, 2015 12:53 PM (EDT)
Hong Kong //BestWire// - A.M. Best has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of "a-" to Thaire Life Assurance Public Co., Ltd. (Thaire Life) (Thailand). The outlook assigned to both ratings is stable.
The ratings reflect Thaire Life's solid risk-adjusted capitalization, track record of favorable operating results and its competitive strength in Thailand's life reinsurance market.
Thaire Life's moderate underwriting leverage and investment risk profile contribute to the company's solid risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR). Thaire Life's underwriting portfolio has low potential variability and a demonstrated track record of consistently favorable results over the past five years, showing an increasing trend in absolute terms.
Thaire Life, the only domestic life reinsurer operating in Thailand, became an authorized company on the Stock Exchange of Thailand in October 2013. As of March 13, 2015, Thai Reinsurance Public Company Limited (Thai Re) further reduced its shareholding in Thaire Life from 41.50% to 24.83%. While Thai Re recognized this as an investment in an associated company, it remains the largest shareholder in Thaire Life. Thai Re's chief executive officer also assumes the role of chairman on Thaire Life's executive board.
Thaire Life's competitive strength includes its expertise in Thailand's life insurance market and the various supports the company provides to its cedants, such as product development and distribution strategies. This support helps Thaire Life develop strong relationships with its cedants.
Partially offsetting these positive rating factors is Thaire Life's high dividend payout ratios in recent years, which leads to concern over whether Thaire Life's retained earnings may be sufficient to support the company's capital and surplus growth in the coming years, in view of Thaire Life's continuously growing underwriting book and investment portfolio.
This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best's Ratings & Criteria Center.
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