KUALA LUMPUR, March 29 (Bernama) -- AM Best has revised the outlook to positive from stable for the long-term issuer credit rating (Long-Term ICR) and affirmed the financial strength rating (FSR) of B++ (Good) and the long-term ICR of “bbb” (Good) of Vietnam’s Hanoi Reinsurance Joint Stock Corporation (Hanoi Re).
The outlook of the FSR is stable and the global credit rating agency has assigned a Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) to Hanoi Re, formerly known as PVI Reinsurance Joint Stock Corporation (PVI Re), with a stable outlook.
The credit ratings (ratings) reflect Hanoi Re’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
According to AM Best in a statement, the ratings also factor in rating enhancement from Hanoi Re’s ultimate parent, HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI V.a.G.).
The revised Long-Term ICR outlook reflects an improving trend in Hanoi Re’s balance sheet strength fundamentals.
Correspondingly, the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, improved to the strongest level in fiscal-year 2023 from a very strong level in fiscal-year 2022.
Notwithstanding, risk-adjusted capitalisation has shown moderate volatility in recent years driven by high dividend payouts and increasing capital requirements arising from business growth and investments.
AM Best views Hanoi Re’s operating performance as strong, supported by its five-year average return-on-equity ratio of 16.6 per cent (2019-2023), while underwriting results remained favourable in 2023, benefitting from profitable domestic business, which included business sourced from its sister company, PVI Insurance Corporation.
-- BERNAMA
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