A.M. Best Affirms Ratings of Bangkok Insurance Public Company Limited

HONG KONG--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Bangkok Insurance Public Company Limited (BKI) (Thailand). The outlook for both ratings is stable.

The ratings reflect BKI’s solid risk-adjusted capitalization, profitable operation results and its prominent market profile.

BKI’s low underwriting leverage, moderate level of retained exposure and prudent arrangement of a reinsurance program contribute to the company’s solid risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR). BKI’s underwriting results returned to positive for two consecutive years in 2013 and 2014, after reporting underwriting losses in fiscal years 2011 and 2012 due to severe flooding in Thailand in late 2011. The company continued to report positive investment results in 2014, and net investment income from interest and dividends has been consistent over the past ten years.

With over 68 years of operation in Thailand, BKI has established a strong presence in the local non-life insurance market. The company is one of the leading non-life insurers in Thailand, ranked third in 2014 in terms of direct premium written. Underwriting experience, capacity and claims management are considered to be BKI’s competitive strength.

Offsetting rating factors include BKI’s concentration risk from its equity investment, which represents a sizable amount of its total invested assets. This is further exacerbated by three related holdings, which are BKI’s strategic long-term investments and represent the bulk of the equities. Adverse movement in the equity market could have a negative impact on BKI’s capitalization level.

Future positive rating actions could occur if BKI can continue to demonstrate favorable underwriting and investment performance despite the competitive non-life insurance market in Thailand, maintain a solid risk-adjusted capitalization level and enhance its investment risk management capability. Negative rating actions could occur if there were a material decline in BKI’s risk-adjusted capitalization level resulting from deterioration in its underwriting results or decrease in its stock holdings value.

The methodology used in determining these interactive ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Catastrophe Analysis in A.M. Best Ratings

• Evaluating Country Risk

• Risk Management and the Rating Process for Insurance Companies

• Understanding Universal BCAR

Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.

This press release relates to rating(s) that have been published on A.M. 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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150529005812/en/

A.M. Best Company, Inc.
Jeff Yeung, +852 2827 3413
Associate Director
[email protected]
or
Moungmo Lee, +65 6589 8412
General Manager
[email protected]
or
Christopher Sharkey, +(1) 908 439 2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company, Inc.

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