KUALA LUMPUR, Sept 10 (Bernama) -- Global credit rating agency, AM Best has assigned a financial strength rating of A- (Excellent) and a long-term issuer credit rating of “a-” (Excellent) to Thai-based Allianz Ayudhya General Insurance Public Company Limited (AAGI).
In a statement, AM Best said these credit ratings (ratings) which have a stable outlook reflected AAGI’s balance sheet strength, which was assessed as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management, along with the benefits the company received from Allianz SE (Allianz group) rating enhancement.
AAGI’s balance sheet strength assessment is assessed as strong, supported by its strongest level of risk-adjusted capitalisation at year end 2023, as measured by Best’s Capital Adequacy Ratio, and is expected to be at least at the very strong level over the medium term.
The company benefits from strong financial flexibility with access to capital markets through its listed parent holding company, Allianz Ayudhya Capital Public Company Limited.
The credit rating agency views the company’s investment strategy as conservative, with the majority of investments allocated to cash, deposits and high-quality bonds, and it has a moderate reliance on reinsurance to support its underwriting capacity and manage exposure to catastrophic events.
AAGI’s operating performance is viewed as adequate in which the improvement in underwriting performance for year-end 2023 is primarily attributed to the benefits of increased scale, cost management initiatives and a lower acquisition expense ratio, despite an elevated loss ratio emanating from the motor book of business.
AM Best assesses AAGI’s business profile as limited. AAGI is a non-life insurer operating in Thailand and ranks as the ninth largest general insurer, with a market share of 3.5 per cent, based on direct premiums written in 2023.
The company’s underwriting portfolio is well-diversified by line of business and distribution channels. However, it has limited geographic diversification as it only offers its products in Thailand.
The rating enhancement from Allianz SE reflects both explicit and implicit support it receives from the group although AAGI’s operations account for a small portion of the group's consolidated revenue, the company is considered strategically important to the group’s expansion strategy.
-- BERNAMA
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