Hanoi Re Credit Ratings Affirmed Good - AM Best

KUALA LUMPUR, March 21 (Bernama) -- AM Best has affirmed Hanoi Reinsurance Joint-Stock Corporation’s (Hanoi Re) financial strength rating (FSR) of B++ (Good), the long-term issuer credit rating (Long-Term ICR) of “bbb” (Good), and the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional).

AM Best in a statement said the outlook of the FSR and NSR are stable, while the Long-Term ICR is positive.

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.

bootstrap slideshow

The ratings also factor in rating enhancement from Hanoi Re’s ultimate parent, HDI Haftpflichtverband der Deutschen Industrie V.a.G.

Hanoi Re’s capital adequacy has shown a material improvement following a capital injection in 2023, despite being volatile historically due to high dividend payouts and capital requirements from business growth.

The company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, was at the strongest level as at year-end 2024, and is expected to remain at this level over the medium term.

bootstrap slideshow

Its investment portfolio is of moderate-to-high risk, with investments mainly allocated toward cash and term deposits, and the remainder held in non-rated corporate bonds and affiliated private equity investments.

AM Best assesses the company’s operating performance as strong, supported by its five-year average return-on-equity ratio of 14.2 per cent from 2020 to 2024, and continues to report operating profits in 2024, largely supported by favourable investment income.

Hanoi Re is one of the two domestic reinsurers in Vietnam, with a significant volume of business sourced from its affiliated company, PVI Insurance Corporation.

-- BERNAMA