March 20, 2025 Reinsurance

AM Best Affirms Credit Ratings of PVI Insurance Corporation

Business Wire

SINGAPORE--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating of A- (Excellent), the Long-Term Issuer Credit Rating of “a-” (Excellent) and the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) of PVI Insurance Corporation (PVI Insurance). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect PVI Insurance’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in rating enhancement from PVI Insurance’s ultimate parent, HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G.).

PVI Insurance’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to remain at the strongest level over the medium term. PVI Insurance benefits from good financial flexibility, given its majority ownership by HDI V.a.G. AM Best views the company’s investment portfolio to be of moderate risk, with the majority of investments allocated toward cash and term deposits and the remainder held in non-rated corporate bonds, affiliated private equity investments and real estate. Offsetting factors include the company’s high dividend payout ratio and high reinsurance dependence to support the underwriting of large commercial property, engineering and energy risks.

AM Best views PVI Insurance’s operating performance as strong, supported by its five-year average return-on-equity ratio of 17.1% (2020-2024). While underwriting results were affected by Typhoon Yagi, the overall impact was limited, and the company continued to generate favourable operating earnings, reporting a return on equity ratio of 14% in 2024. Underwriting performance is expected to remain robust over the medium term, supported by profitable results in both commercial and retail lines of business. Investment income, consisting mainly of interest and dividend incomes, is expected to remain as a key contributor to the company’s overall earnings.

AM Best views PVI Insurance’s business profile as neutral. The company is the largest non-life insurer in Vietnam based on 2023 direct premiums and it continues to grow its market share. The company has a strong market position in commercial and industrial lines of business, including energy, property, engineering, aviation and marine insurance, as supported by its affiliation with the PetroVietnam (PVN) group, one of the largest state-owned oil and gas corporations in Vietnam. Support from HDI V.a.G. has enhanced PVI Insurance's technical expertise and service offerings, strengthening its position in the regional industrial risks’ insurance segment. Business expansion in inwards reinsurance was a major contributor to recent growth, although prudent accumulation management remains an area to be monitored.

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.