AM Best Assigns Credit Ratings to Starr International Insurance (Thailand) Public Company Limited

SINGAPORE–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Starr International Insurance (Thailand) Public Company Limited (SIIT) (Thailand). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect SIIT’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). In addition, SIIT benefits from rating enhancement arising from the implicit and explicit support provided by Starr International Company, Inc. (Starr Group).

SIIT’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is expected to remain at the strongest level over the near to medium term.

Although SIIT has a small absolute capital base, it benefits from good financial flexibility and reinsurance support provided by Starr Group. The company has a conservative investment portfolio comprised principally of high-quality bonds and cash deposits. However, SIIT has a high dependence on reinsurance to increase its underwriting capacity and to manage its exposure to catastrophe accumulations and large single risks, notwithstanding credit risk is mitigated by using well-rated reinsurance counterparties.

AM Best views SIIT’s operating performance as adequate. While the company’s earnings have been volatile prior to its acquisition by the Starr Group in 2022, future earnings are expected to benefit from the successful execution of its business transformation initiatives. Underwriting results have improved since the second half of 2022, supported in part by an intra-group reinsurance arrangement, which mitigated potential adverse development of unexpired legacy risks as of July 1, 2022. SIIT’s prospective underwriting results are expected to benefit from cost rationalisation initiatives, economies of scale and favourable reinsurance commissions. Investment returns, mainly arising from interest income are expected to make a small, but stable contribution to the overall earnings over the medium term.

SIIT’s business profile is assessed as limited. The company was formerly known as FPG Insurance (Thailand) Public Company Limited and became a majority owned subsidiary of the Starr Group in December 2022. The business profile assessment reflects SIIT’s position as a small-size non-life insurer in Thailand based on 2022 gross premiums written. While the company has been focused on personal lines prior to acquisition by the Starr Group, it has made significant progress to reposition its portfolio towards construction, engineering and energy lines, in which it is expected to benefit from the group’s technical expertise. Nonetheless, the company’s underwriting portfolio is expected to be concentrated toward the aforementioned segments with the majority of its business sourced from Thailand.

In addition to explicit support in the form of a capital maintenance agreement and a recent capital injection and reinsurance support, SIIT is expected to benefit from implicit support from the group, which includes oversight and expertise in areas of investment, underwriting, ERM and IT administration. Despite expectations that SIIT will make small contributions to the group’s consolidated revenue and earnings over the medium term, SIIT is considered important to the group in terms of accessing the Thailand insurance market and growing its presence in Asia.

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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Contacts

Susan Tan
Financial Analyst
+65 6303 5023
susan.tan@ambest.com

Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com

Chris Lim, FCII, CFA
Associate Director
+65 6303 5018
chris.lim@ambest.com

Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com