AM Best Affirms Credit Ratings of Thaire Life Assurance Public Company Limited

SINGAPORE--(BUSINESS WIRE)--
AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Thaire Life Assurance Public Company Limited (Thaire Life) (Thailand). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect Thaire Life’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Thaire Life’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation that remained at the strongest level at fiscal year-end 2021, 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, but this is partially mitigated by a good level of overall portfolio diversification. The company’s modest absolute capital base is viewed to have the potential to increase the sensitivity of capital adequacy to shock events, as well as to changes in future performance.

AM Best views Thaire Life’s operating performance as strong, albeit the continued negative outlook for the FSR and Long-Term ICR reflects pressure on this assessment. The company has reported a five-year weighted average return-on-equity ratio of 15.2% (2017-2021); however, its underwriting performance has seen a declining trend over the recent years largely due to adverse claims experience in relation to the COVID-19 pandemic and business growth in the less profitable health class of business. In response, the company has taken some remedial actions to improve its claims experience and these actions supported the reporting of an improved operating results during the first half of 2022. Prospectively, AM Best expects that Thaire Life will continue to increase its growth in the health insurance business while executing remedial actions aimed at improving its near-term profitability. Nonetheless, AM Best notes that challenges remain for the company in executing on this business plan, given the competitive market conditions in Thailand’s life and health market.

AM Best considers Thaire Life’s business profile to be neutral. The company is the only domestic life reinsurer in Thailand and maintains long-standing relationships with key cedants. In light of challenging market conditions, the company’s business growth was constrained in 2019 and 2020. However, the company’s gross premium written grew by 25% in 2021, mainly due to the company’s expansion of health and group reinsurance products from new treaties along with growth of the health insurance market in Thailand. AM Best expects Thaire Life’s future business expansion 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.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Sin Yee Chuah, CFA

Financial Analyst

+65 6303 5022

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Michael Dunckley, CFA

Director, Analytics

+65 6303 5020

[email protected]

Jeff Mango
Managing Director,

Strategy Communications

+1 908 439 2200, ext. 5204

[email protected]

Source: AM Best