SINGAPORE–(BUSINESS WIRE)–AM Best has 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 outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Dhipayas balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Dhipayas risk-adjusted capitalisation remained at the strongest level in 2021, as measured by Bests Capital Adequacy Ratio (BCAR). The companys regulatory capital adequacy ratio also continued to exceed the regulatory minimum requirement by a good margin over a number of years. However, Dhipaya remains subject to moderate investment risk given its notable allocation to equities and mutual funds. In addition, the company relies heavily on reinsurance to support the underwriting of very large risks and to manage catastrophe exposure, although this is mitigated partially by the high credit quality of the companys reinsurance counterparties.
The company has a track record of strong operating performance with a five-year average combined ratio and operating ratio of 80% and 70%, respectively (2017-2021). While Dhipaya continued to generate strong underwriting performance in the personal accident, fire and industrial all risk lines of business, the company recorded a contraction in overall technical profit in 2021 as a result of unfavourable claims experience from COVID-19-related policies. Although the COVID-19-related claims are expected to continue impacting Dhipayas underwriting performance over the near term, the companys current portfolio composition with less exposure to highly competitive lines of business and its good balance of earnings are expected to mitigate these headwinds.
The company has established a strong presence in Thailands non-life market, ranking second with a market share of 11% in 2021 in terms of direct premium written. In addition, Dhipaya has held a dominant market position in several major segments such as personal accident, fire and industrial risks. The companys business profile also benefits from its strong shareholder support through business referrals and access to extensive countrywide distribution networks.
AM Best views Dhipayas risk management capabilities as appropriate relative to the profile of the key risks. The company has developed a comprehensive ERM framework with proper risk identification and monitoring tools in place.
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 Bests 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 Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Bests Credit Ratings. For information on the proper use of Bests Credit Ratings, Bests Performance Assessments, Bests Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Bests 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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Contacts
Trung Tran
Senior Financial Analyst
+65 6303 5019
trung.tran@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Kanika Thukral
Senior Financial Analyst
+65 6303 5025
kanika.thukral@ambest.com
Jeff Mango
Managing Director,
Strategy & Communications
+1 908 439 2200, ext. 5204
jeffrey.mango@ambest.com
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