AM Best Affirms Vietnam National Reinsurance Corporation Credit Ratings 

KUALA LUMPUR, May 9 (Bernama) -- AM Best has affirmed the financial strength rating of B++ (Good), the long-term issuer credit rating of “bbb+” (Good), and the Vietnam National Scale Rating (NSR) of aaa.VN (Exceptional) of Vietnam National Reinsurance Corporation (VINARE), with a stable outlook.

In a statement, the global credit rating agency said these credit ratings (ratings) reflected VINARE’s very strong balance sheet strength, strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

VINARE’s balance sheet strength is supported by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, which is expected to remain at the strongest level over the medium term. The reinsurer’s regulatory solvency position also remains well above the minimum requirement.

However, moderating factors include VINARE’s moderate investment risk due to equity holding and a high dividend payout ratio. The company’s moderate reliance on retrocession for underwriting large commercial risks is partly offset by the good credit quality of its retrocession panel.

VINARE’s operating performance is assessed as strong, backed by a five-year average return on equity of 10.6 per cent from 2020 to 2024. In 2024, the company reported a combined ratio of 96.8 per cent, driven by lower expenses but impacted by higher losses from Typhoon Yagi in September.

Investment income remained a key earnings contributor, with a net investment yield of 7.8 per cent in 2024.

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AM Best expects VINARE to maintain strong operating performance, supported by favourable underwriting in core commercial lines and robust investment returns.

The company’s business profile is considered neutral, reflecting its position as Vietnam’s national reinsurer with long-standing relationships with local cedants and a well-diversified underwriting portfolio.

VINARE’s ERM is deemed appropriate, underpinned by a developed reporting system and prudent risk management, further supported by technical expertise from its second-largest shareholder, Swiss Reinsurance Company Ltd.

-- BERNAMA