The PVI Insurance Corporation's headquarters in Hanoi. (Photo courtesy of PVI Insurance)
PVI Insurance's Financial Strength Rating was lifted to A-(Excellent) from B (Good) and the Long-Term Issuer Credit Rating to “a-” (Excellent)from “bbb ” (Good).
The rating upgrades reflect PVI Insurance’s balance sheetstrength, which AM Best assesses as very strong, as well as its strongoperating performance, neutral business profile and appropriate enterprise riskmanagement (ERM). The ratings also factor in rating enhancement fromPVI’s parent company, HDI.
The ratings also reflect the company’s consistentlyfavourable underwriting performance and outstanding overall profitability.Robust underwriting performance is supported by profitable commercial andindustrial businesses.
PVI Insurance has reported consistent technical profitability anda five-year average return-on-equity (ROE) ratio of 17% (2017-2021). Thecompany also posted strong premium growth of 175 in 2022.
AM Best expects PVI Insurance will continue to maintain itsunderwriting profitability with a net combined ratio at approximately thelow-90% range over the medium term. Investment returns, arising mainly frominterest and dividend income, have been consistently supportive of operatingearnings.
PVI Insurance’s risk-adjusted capitalisation is expected todecrease, albeit remaining at a strong level over the medium term, asmeasured by Best’s Capital Adequacy Ratio (BCAR). The decline is mainly due toinsurance business growth, higher investment exposure and a high dividendpayout ratio.
The company has a moderate risk investment portfolio, with anincreasing allocation to non-rated corporate bonds and affiliated privateequity investments, although a majority of investments remain allocated to cashand term deposits. Key offsetting factors include its high reinsurancedependence.
PVI Insurance has a strong market position in commercial andindustrial lines of business, including energy, property, engineering, aviationand marine insurance, supported by its affiliation with the PetroVietnam (PVN)group, one of the largest state-owned oil and gas corporations in Vietnam. Thecompany also receives support from HDI V.a.G. to enhance its technicalexpertise, service offerings, risk management and governance.
AM Best considers the company’s ERM approach as appropriate giventhe size and complexity of its current operations./.
VNA
