SINGAPORE--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Thaire Life Assurance Public Company Limited (Thaire Life) (Thailand). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Thaire Life’s strong risk-adjusted capitalization and favorable operating performance.
Thaire Life’s risk-adjusted capitalization is supported by its moderate underwriting leverage. In terms of operating performance, the company continues to generate good returns and maintains a return on equity of more than 20%. However, the 2016 economic slowdown in Thailand and additional regulatory costs, have placed pressure on the company’s results. While underwriting performance has weakened, diversification across product lines has helped to limit volatility.
Thaire Life is an established player in Thailand’s life reinsurance market. In addition to reinsurance capacity, the company offers value-added services in areas such as product development, distribution and risk management. These services help Thaire Life strengthen its relationships with cedants.
An offsetting rating factor is the limited demand for reinsurance among direct life insurers. The company serves a market that is dominated by considerably larger cedants with high premium retentions and low reinsurance needs. In such an environment, limited growth in size and scale relative to cedants could diminish Thaire Life’s profile as a provider of reinsurance protection over time.
Positive rating actions are not likely at present. Negative rating pressure could result from a weakening of the company’s business profile or deterioration in operating performance.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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