ASIAN REINSURANCE CORPORATION CREDIT RATINGS AFFIRMED - AM BEST

KUALA LUMPUR, May 7 -- AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of ‘bbb-’ of Asian Reinsurance Corporation (Asian Re) Thailand. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Asian Re’s balance sheet strength, which the United States-based global credit rating agency assesses as strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

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

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According to a statement, AM Best expects the company’s capital adequacy to remain supported by its low underwriting leverage and its investment portfolio, mainly in cash and short-term deposits.

Last year, Asian Re reported an operating loss, and its five-year average return-on-equity ratio is modest at 0.5 per cent (2016-2020). Underwriting results remain volatile, with the company’s average combined ratio over the past five years exceeding 125 per cent (2016-2020).

AM Best views Asian Re’s business profile to be limited, as the company faces pressure in rebuilding its presence in the regional reinsurance market following catastrophe events in 2011 and 2012, which led to a need to recapitalise the company.

The company continues to implement a number of strategic initiatives and business partnerships aimed at expanding its underwriting portfolio and market presence. 

AM Best considers Asian Re’s ERM approach to be appropriate given the size and complexity of its current operations. The company has taken steps to develop the identification, management and mitigation of key risks, and has demonstrated improvements in its risk management capabilities over recent years. 

For more information, visit www.ambest.com.

-- BERNAMA