AM Best Revises Outlooks to Stable for Dhipaya Insurance Public Company Limited
August 01 2024 - 12:38PM
Business Wire
AM Best has revised the outlooks to stable from negative
and affirmed the Financial Strength Rating of A- (Excellent) and
the Long-Term Issuer Credit Rating of “a-” (Excellent) of Dhipaya
Insurance Public Company Limited (Dhipaya) (Thailand).
The Credit Ratings reflect Dhipaya’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.
The revision of the outlooks to stable from negative reflect an
improvement in Dhipaya’s balance sheet strength assessment. The
company’s risk-adjusted capitalisation, as measured by Best’s
Capital Adequacy Ratio (BCAR), showed an improvement in 2023,
mainly supported by a lower exposure to equity investment risk and
an increase in shareholders’ equity.
Dhipaya’s balance sheet strength assessment is viewed as strong,
supported by its strongest risk-adjusted capitalisation. The
company benefits from strong financial flexibility as a group
company of Dhipaya Group Holdings Public Company Limited (Dhipaya
Group), which is a listed insurance holding company with access to
capital markets. The company has a moderate risk investment
strategy, given its notable allocation to equities and mutual
funds. In addition, the company has a high reliance on reinsurance,
although this is mitigated partially by the typically high credit
quality of its reinsurance counterparties. The balance sheet
strength assessment also factors in a neutral holding company
impact arising from its ultimate ownership by Dhipaya Group.
Dhipaya’s operating performance is assessed as strong, with a
five-year average return-on-equity ratio of 20.4% and combined
ratio of 84.4% (2019-2023). Overall earnings have been supported by
favourable underwriting performance and stable investment income.
The underwriting performance improved in fiscal-year 2023,
primarily due to better claims experience in health insurance, as
the company was no longer affected by COVID-19 related claims in
2023. Dhipaya’s investment income, which comprises interest and
dividend income, continues to remain supportive of overall
earnings.
AM Best assesses Dhipaya’s business profile as neutral. The
company has a strong presence in Thailand’s non-life market,
ranking second with a market share of 12% in 2023, based on direct
premium written. Dhipaya holds a dominant market position in
several major segments, including fire insurance. The company’s
business profile also benefits from its strong shareholder support
through business referrals and access to extensive countrywide
distribution networks.
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
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Chris Lim, FCII, CFA Associate Director, Analytics
+65 6303 5018 chris.lim@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com